Rural America will Benefit from Competitive Carriers’ Access to Additional Low-Band Spectrum
By Steven K. Berry, President & CEO, CCA
May 9, 2014 – The 600 MHz incentive auction is not about the largest one or two – or even four – carriers. It is about all carriers that need low band spectrum to compete – including CCA’s more than 100 carrier members, many of which serve the most rural and hard-to-reach areas of the United States. More importantly, the incentive auction is about consumers, and meeting all of their mobile broadband needs. When competitive carriers have the opportunity to bid on and win much-needed low band spectrum, rural America wins, too.
The Commission’s proposed rules to reserve at least 30 MHz after the auction surpasses certain revenue targets guards against excessive spectrum concentration in the 600 MHz incentive auction. Ensuring that the two nationally dominant carriers cannot prevent competitive carriers from acquiring the low-band resources they need to compete will accelerate innovation, expand consumer choice, and stimulate competition among wireless broadband providers.
AT&T pundit Fred Campbell is simply wrong when he assumes that the FCC’s pro-competition rules are intended to ensure one or two particular carriers win. The FCC’s proposed incentive auction rules simply create a reserve of licenses to prevent any already-dominant carrier from, as Chairman Wheeler said, “sweeping the auction” and taking home all or most of the licenses available.
CCA members are fiercely competitive, ardently independent companies, who have deployed wireless services in some of the most rural parts of the country and are more than willing to pay their fair share for valuable spectrum. Competitive carriers bid aggressively in Auction 73, including nearly $2 billion in winning bids from CCA members. As a result of the Lower 700 MHz auction, CCA members understand the significance of the 600 MHz auction and the need to be a part of the 600 MHz ecosystem. This auction may be the last chance for competitive carriers to strengthen and expand their service to rural customers by harnessing the unique propagation characteristics of 600 MHz low-band frequencies that make it possible to serve rural customers in a much more cost effective manner.
CCA’s members want a fair shot at bidding on 600 MHz spectrum, and are encouraged by the competitive opportunities fostered by the FCC’s proposed rules. Countless other rural interests have joined CCA and its member companies in speaking forcefully – and passionately – about how much the 600 MHz auction will mean to rural America. Providing competitive carriers with a real opportunity to win spectrum will encourage them to participate in the auction, which will, in turn, expand broadband deployment while driving revenues to the US Treasury. That’s a win for rural America, a win for the economy and a win for public safety.
The wireless industry is at a critical crossroads – one road leads down a continued path towards a duopoly, and the other leads to a more competitive industry. With its proposed incentive auction rules, the FCC is clearly choosing competition. But there is still work to be done.
Building on its proposed framework, the Commission should account for the effects of national market power during the auction, as the Department of Justice recommended, by adopting a national eligibility requirement for reserved spectrum in addition to a local eligibility requirement. A dual eligibility requirement would more accurately reflect market power while still allowing the two largest carriers to bid on reserved blocks of spectrum in local markets where they do not hold excessive low-band spectrum. Similarly, competition would be enhanced if the Commission reserved more licenses for competitive access by allocating an odd number of unreserved licenses, which would force the largest carriers to compete with each other and generate more revenue in both the reserved and unreserved blocks.
The FCC’s proposed plan presents opportunities for all carriers to participate in the auction – including more than a hundred smaller and rural carriers Campbell conveniently fails to acknowledge. We look forward to an auction where every competitive carrier can compete and win valuable low-band spectrum to expand the reach of wireless broadband service throughout the United States.