Wheeler Faces Barrage of Auction Questions During House Hearing

Democrats worried about the auction’s triggered reserve. Eshoo and Rep. Mike Doyle, D-Pa., questioned how the commission is moving forward with it. “What is the Commission doing to address the concerns that many of us have about the reserve trigger, especially in regards to the trigger coming into play so late in the auction?” Doyle asked. He was one of the House Democrats who wrote to the FCC urging expansion of the reserve to at least four blocks (see 1506170032).

“The question becomes, are you going to cut back on the amount of bidding that goes on for reserve spectrum,” Wheeler told Doyle. “And we have taken the position that you should not. That, first of all, the reserve has been created.” He called the establishment “a huge step” that some on the committee and at the FCC disagree with. Wheeler said the question becomes whether the auction should function through the reserve process or whether “you want to truncate it for a quicker trigger,” he said. If the auction is paused for those in the reserve, “it seems to me what that ends up doing is reducing participation in the auction,” Wheeler said. “It probably reduces the prices that people will pay. … Now what we should not be doing is picking winners and losers inside that reserve.”

“Why do you oppose putting broadcasters in the duplex gap?” Rep. Brett Guthrie, R-Ky., asked Commissioner Ajit Pai. Pai pointed to opposition from multiple stakeholders, including broadcasters and carriers and unlicensed advocates. Pai would prefer placing them in the uplink portion, he said.

More Spectrum Questions

Subcommittee Chairman Greg Walden, R-Ore., and others also pressed Wheeler about the repacking process and what the auction will mean for low-power TV and translator stakeholders. “We’re going to help them find channels if they get displaced,” Wheeler told Walden. “You don’t know where displacement is going to happen.” Wheeler told Walden the FCC will begin a rulemaking to allow for channel-sharing and said the rule means the band occupants wouldn't have to vacate until the carriers are ready to turn on service, allowing a “significant buffer of time.” Rep. Joe Barton, R-Texas, who had weighed the need for legislation with Walden last year, is “one of the advocates for low-power television,” he affirmed. Rep. Kevin Cramer, R-N.D., worried the $1.7 billion relocation fund won’t be enough and wanted some way to reassure his state’s broadcasters. “We do need to make sure we’re kept within our budget,” Wheeler said. “We can’t change that number.” Wheeler compared the auction to a complex jigsaw puzzle, "except there’s no picture on the front of the box,” when speaking to Rep. Doris Matsui, D-Calif.

The FCC’s designated entity rules also got Hill attention. “They replaced one set of rules that were gamed with a new set to be gamed,” Walden lamented. Rep. Yvette Clarke, D-N.Y., pressed the commissioners on the rules as well, and Wheeler said he hoped the rules would still benefit authentic designated entities. The FCC “has opened the door for large corporations to abuse” the rules, Pai said.

Federal agencies are “squatting on a lot of spectrum,” Commerce Committee Vice Chairwoman Marsha Blackburn, R-Tenn., told Wheeler, arguing it’s “dangerous” to have no inventory of it all. “What I would like to ask you to do is quantify this. … Don’t let them squat on this spectrum.” The FCC helps manage commercial spectrum, while NTIA manages government spectrum. Matsui echoed Blackburn’s point about the need for more spectrum, and Wheeler, a former head of CTIA, told her he agreed a pipeline of more spectrum is needed. Wheeler pointed to the Federal Spectrum Incentive Act (HR-1641), a bill from Matsui and Guthrie, as possible guidance on this front.

“We need to make sure there’s more spectrum in the pipeline,” agreed Pai. “I think in some cases it might be" needed, Pai added of congressional action, pointing to its necessity involving federal spectrum.

“Chairman Wheeler did an impressive job of describing the trade-offs and tough decisions that, while not making any stakeholder 100% happy, will keep us on track for a March 2016 start to a successful Incentive Auction," emailed Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition.

Other Items

Lawmakers pressed Wheeler and Pai on other topics, from broadband support to video issues to Lifeline. Net neutrality received minimal attention, in contrast to many hearings Wheeler faced earlier in the year.

Walden pressed Wheeler on what constitutes the definition of an autodialer. Wheeler ultimately said lawmakers’ telephone town halls would constitute that and could always have been considered illegal. “Wow,” Walden said, turning to his colleagues. “That would be news to a lot of people.” He wondered how this would affect pollsters and the ability to do random sampling. Eshoo said the statute in question went back to 1991 and argued “we have to have the elasticity to stay up with the times,” she said. “Meeting with people relative to a telephone town hall meeting has been overwhelmingly embraced by my constituents.” Congress may need to revisit the statute, Walden said.

Wheeler expects a Lifeline rulemaking “before the year is up,” he said. “And it begins with overhaul.” Wheeler derided Lifeline as “designed wrong” and “overseen wrong” and slammed as “ridiculous” the set-up involving people benefiting from the funds to be responsible for certification and the lack of record-keeping requirements for those receiving the funds. Also “ridiculous” is the lack of a database to root out duplication, Wheeler said. The FCC has sought to oversee the program more rigorously, taking steps such as removing 25 million people who were inappropriately participating and applying $100 million in penalties. “What this rulemaking is going to do is continue that [FCC oversight] and fix the underlying rule problems,” he said.

One item that caught Wheeler by surprise was a bipartisan letter from all subcommittee members about wireless number portability (see 1507090039). Wheeler sent letters to all carriers and trade associations asking for a solution and a reply within 60 days. “I really appreciate the way this committee has called that to our attention,” Wheeler said. “That’s contrary to our rules, and I’ve asked that it be fixed.” CTIA General Counsel Tom Power emphasized challenges. “As a working group of the FCC’s numbering experts recently found, nationwide number portability faces a number of technical, policy and jurisdictional challenges,” he said in a statement. “CTIA will work with our member companies and interested stakeholders to consider the challenges and potential solutions in response to the Chairman’s inquiry.”

“We intend to have an NPRM out by September 4, as this committee has told us to do on that topic,” Wheeler told Eshoo of an expected item on retransmission consent good-faith negotiation. Doyle pressed Wheeler on the timing for the special-access proceeding, worrying of a “narrowing” window of possibility and wondering if it would be in his lifetime. “I hope it is while I am chairman, and that is a shorter period than your lifetime,” Wheeler told Doyle. Rep. Bobby Rush, D-Ill., warned of the “telephonic terrorism” afflicting prison phone call systems, with some prisons now charging high rates for video calls. Rep. Chris Collins, R-N.Y., worried that the FCC saw pirate radio enforcement as “a low priority,” while Wheeler disagreed and cited aggressive pursuit of the issue. Congress could pass legislation to target those “aiding and abetting,” Wheeler said. “We could use some additional authority so we could have some teeth.” Walden, meanwhile, lauded AT&T’s move to activate FM chips in its smartphones (see 1507280054">1507280054). “We hope other carriers will follow suit,” Walden said.