Pai ‘Hopeful’ Turnover at FCC Won’t Slow Work on Incentive Auction, but Largent Expresses Concern

"Generally speaking, of course, when you have the departure of 40 percent of the commission, the trains will slow a bit,” Pai said Thursday at a Catholic University Columbus School of Law event. “I'm hopeful they won’t slow to a point where we still couldn’t complete the goal that we set for conducting an incentive auction in 2014. That still remains our goal, at least in our office.” Achieving that goal remains important because the uncertainty in the broadcast and wireless industries “doesn’t serve anybody very well,” Pai said. “I'm hopeful that, working collaboratively with my two remaining colleagues, and any future colleagues to come, we can still get the structure of the auction in place in time to have a successful incentive auction in 2014."

Development of the incentive auction remains the FCC’s biggest proceeding, Pai said. The FCC hasn’t yet made any “definitive judgments,” he said, saying he’s still reading through the comments and reply comments submitted in the proceeding. But it’s clear that the agency will need to address issues with the proposed band plan, repacking and auction rules, Pai said. “There are no easy answers here, to say the least, in part because of statutory constraints, in part because of technical constraints, and in part just because we can’t have it all, as it were,” he said.

Pai said he doesn’t have any particular metrics for a successful incentive auction, but the auction will only be successful if broadcasters and wireless carriers “come to the party. That’s critical because I think maximization of revenue is going to be a very important thing for the FCC to focus on. That can’t happen if, for example, we tell the broadcasters they can bid this much but no higher, or if we tell the wireless companies ‘You and you can participate, but the rest of you can’t.'” Commenters in the proceeding have disagreed over whether the FCC should restrict bidding by Verizon Wireless and AT&T.

The FCC should also continue to advance the IP transition by endorsing all-IP pilot programs, Pai said. All-IP pilot programs like AT&T’s proposed trials in select wire centers “would be a great idea,” he said. “In the context of the DTV transition and any other areas where the FCC has conducted pilot programs, this has been extremely useful for us because we were able to figure out what works and what doesn’t work, and then we take those lessons and apply them as we make a nationwide transition.” That will be particularly important in the IP transition because of the broad disagreement over how a full transition will play out, Pai said. “Some people say the sky will fall if we transition to all IP, some people say there aren’t going to be any problems at all,” he said. “I think it would be useful for us to do an all-IP pilot program so we can see in reality what’s going to happen."

CTIA Concerns

"Both in Congress and in agencies like the FCC, you never want to give them an excuse for inaction,” said Largent, a former Republican member of the House from Oklahoma. “Having the turnover that they've had at the FCC is an excuse for inaction. My hope is that this is issue is important enough to everybody,” so the agency “will continue to push on getting this first auction teed up and ready to go in 2014,” he said. “That will certainly be our push at the FCC and in Congress and with the administration."

CTIA Vice President Chris Guttman-McCabe said delay in developing auction rules isn’t inevitable. “It certainly doesn’t have to slow down,” he said at the breakfast. “There have been transitions pretty much every four years forever, and the reality is the senior policy folks that are working on this issue oftentimes remain.” There’s broad support for an incentive auction, Guttman-McCabe noted. “How many things in Washington can you say House, Senate, Republican, Democrat and White House all agreed on?”

Largent also was sharply critical of the makeup of the President’s Council of Advisers on Science and Technology, which released a controversial report last year urging the Obama administration to embrace spectrum sharing as an alternative to clearing federal users off the spectrum licenses they now hold (CD July 23/12 p1). “I will just remind you that there were no wireless carriers on the PCAST panel, none, not one,” he said. “How do you have a group that has nothing to do with the wireless industry setting policy for the wireless industry? It doesn’t make sense to me.”

"I'm as frustrated about this as Steve is,” Guttman-McCabe said of the PCAST report. “There were no infrastructure vendors, there were no handset manufacturers … and there were no carriers and all of a sudden this is the new norm."

The administration needs to be more forceful in getting federal agencies to come to the table to discuss spectrum they now hold, which could be converted to commercial use, Largent said. “I'm not sure any administration would have treated this any differently, and so I would say this whether it was a Republican or a Democrat in the White House,” he said: “You always have to apply … pressure to these agencies. It doesn’t cost them anything to hang onto” spectrum.

Largent called for a more sophisticated audit of federal spectrum holdings. “I think there’s some things that would be done that would have the potential to free up spectrum, but there would need to be some accountability there as well,” he said. But Largent said he’s less certain about whether the government should assess agencies fees for the spectrum they use, an approach embraced by the U.K.

CTIA Vice President Jot Carpenter said some accountability mechanism, which doesn’t apply to agencies in charge of intelligence or national security, might make sense. A requirement that federal agencies “have to make some sort of public declaration to the Congress that would be available to us and to others to inspect that declares the value of the spectrum that they are holding and describes how they're using it and whether they're considered commercial alternatives … that’s all a good idea,” Carpenter said. “To the extent that we can put in front of policymakers information that enables them to press agencies to justify ‘do you need every megahertz you're holding,’ that’s probably a good diea.”

"Our goals and objectives for this year haven’t changed that much,” Largent said in opening comments. “We're still trying to get more spectrum, and the truth is we've been on this mantra for four years now, through the whole first term of the president, and hopefully it won’t take us another four years before we get this to happen"

Largent said he doesn’t know who the next FCC chairman will be and “doesn’t care” whether it’s a man or woman or “where they come from.” Largent’s predecessor at CTIA, Tom Wheeler, is viewed as the top candidate. “What I do care about is … that they want to push as hard as the current chairman has pushed for getting additional spectrum allocated for the wireless industry,” Largent said. The spectrum crunch remains, he said. “We're closer to that date now, whenever that is, of running out of spectrum or having to curtail services to customers because we don’t have enough spectrum.”