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FCC approves rules for spectrum auction (Roundup)

By Steve Ragan Aug 1, 2007, 15:50 GMT

Yesterday, the Federal Communications Commission (FCC) voted on the rules for the spectrum auction that is to take place next year. The outcome of the vote is good for consumers, as they will get more options for their wireless devices and cellular phones.The final FCC vote and the subsequent rules mean several changes to the existing rules governing the commercial services portion of the 700 MHz Band. Most notably, the FCC determined that licensees for one of the spectrum blocks to be auctioned, the large 22-megahertz Upper 700 MHz C Block, will be required to provide a platform that is more open to devices and applications. These licensees will be required to allow customers, device manufacturers, third-party application developers, and others to use any device or application of their choice on their networks in this band, subject to certain conditions. The auction is anonymous, which the FCC hopes will allow an unknown bidder to enter the wireless market. The 700 MHz spectrum is a hot commodity for hi-tech companies. As broadcast TV turns to digital, the 700 MHz band is quickly being vacated. It can penetrate walls and other obstructions with ease and the signal strength is consistent making it something carriers drool over. There is a total of sixty megahertz to be placed up for auction. Twenty-two megahertz are subject to the open access rules and another ten megahertz will be dedicated to a national public safety network. The final ten megahertz will be shared between a commercial operator and public safety agencies. The FCC hopes to rain upwards of $15 billion in total from the auction. Not everyone agreed on the auction rules. Deborah Taylor Tate also had some issues with “open access,” but did not oppose it in the end. Michael Copps and Jonathan Adelstein each wanted to see the rules include the wholesale provision proposed by Google, as well as other consumer groups. However, they both approved the final rules. Robert McDowell, for the first time, voted ‘no’ on the proposed rules, as he is against the open access provisions saying, “…the majority’s decision to impose “open access” requirements on the C Block licensee represents a sharp departure from well-settled FCC precedent.” Gary Shapiro, president and CEO of the Consumer Electronics Association approved of the rules and the vote. In a statement he said, “CEA commends the Commission for adopting rules regarding public safety and new wireless uses in the spectrum to be vacated by broadcasters at the successful completion of the transition to digital television. CEA has long supported consumers’ right to connect their choice of devices to networks so long as these devices cause no harm.” He added, “With today’s decision, consumers will soon enjoy the right to attach devices and download applications of their choosing to a portion of this spectrum. We urge the Commission to ensure that the auction of this spectrum remains on track so that consumers can quickly begin enjoying the benefits realized by the timely conclusion of the DTV transition.” CEA represents more than two thousand companies involved in the design, development, manufacturing, distribution and integration of audio, video, mobile electronics, wireless and landline communications, information technology, digital imaging, home networking, multimedia and accessory products, as well as related services. However, some opposed the rules, and the format of the auction. It should come as no surprise that one vocal critic is Steve Largent, who is CEO of the CITA-The Wireless Association. CITA is against the measures for open access, as it would force companies like Verizon and AT&T to open their networks if they were to bid. In fact it is the open access part of the auction’s format that might cause some wireless vendors to refrain form bidding. “[CITA is] disappointed that a significant portion of this valuable spectrum will be encumbered with mandates that could significantly reduce the number of interested bidders. We remain committed to the principle that wireless consumers and American taxpayers are best served when such a valuable commodity is auctioned in a fair and competitive manner with no strings attached, and we commend Commissioner Robert McDowell for his belief in flexible auction rules and the free-market system.” Largent went on record, pointing out that the changes that the FCC adopted with their vote, “could prohibit those benefits from being even more fully realized,” calling them unfortunate. Another company who got both good and bad news with the vote is Google. However, the news for Google while positive with the adoption of open access is slightly damaged by the missing provision Google proposed earlier this month. The FCC did not include measures for the wholesale provision proposed by Google. Google proposed that, “Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms.” The missing provision might mean Google will not commit the $4.6 billion as they said they would if the rules had met all of the proposed options. With Google seemingly out of the auction before it starts, who will take their place? The FCC placed a price of $4.6 billion on the C Block but if that price is not met during the auction, it can be resold. The problem is that if the C Block is resold, then the commercial airwaves can be resold for a lower bid and without the open access attachment. There is no exact date on when the auction will take place.

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LukeAug 1st, 2007 - 17:27:46

Google will still bid. Hopefully it wins. While there's no requirement about reselling to third parties at wholesale prices, there's also no restrictions. If they win, they could still adapt such rules for the sake of the American public.

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Dave KlimanAug 1st, 2007 - 17:42:07

just realize...

this is how it is when there isn't an internet. here is just one little taste of the AT&T service agreement for the iPhone and things to come for the internet if we don't strengthen it:

Unlimited Voice Services: 'Unlimited' voice services are provided solely for live dialog between two individuals. Unlimited voice services may not be used for conference calling, call forwarding, monitoring services, data transmissions, transmission of broadcasts, transmission of recorded material, or other connections which do not consist of uninterrupted live dialog between two individuals. If AT&T finds that you are using an unlimited voice service offering for other than live dialog between two individuals, AT&T may, at its option, terminate your service or change your plan to one with no unlimited usage components. AT&T will provide notice that it intends to take any of the above actions, and you may terminate the agreement.

before AT&T was broken up by carter's justice dept starting in the 70's, they had the same sort of rules about their phone network. modems were not allowed. you weren't allowed to use any devices, including answering machines. you couldn't sit there and play a recording. you couldn't just hang out quietly on the phone with somebody. of course at $1.50-$3.00 per minute to call places like across the country, who ever could even think of doing anything like that?

that's why we need a neutral, people owned internet. and why we can't just give away all our bandwidth to dinosaurs like AT&T and their last remaining separated chunk, Verizon.

Soon, the bush FCC plans to auction off OUR air waves and the winners look like they will just be AT&T and Verizon. so instead of having an information renaissance we will have more stifling garbage from these monopolists.

just remember, if the internet was limited by this kind of private owner, there'd never have been an amazon.com, Yahoo, Google, eBay, or any of that. that's why democracy will always be more powerful than private crony ownership.

Now Google has come along with the novel idea of buying our bandwidth from us in the upcoming auction only to give it back to us for 'free' with advertising attached. think about it. our airwaves. google gets to profit with ads. its like them owning all our parks, and getting to put up billboards.

even that is really pissing off the monopolists, verizon and at&t, who are lobbying very very strongly to the fcc not to let google get away with giving us back our own airwaves to use as we please with devices yet to be invented by anybody who wants to make anything. at least google is coming along to do something close to how things would be if we simply kept the bandwidth and didn't give it out.

although these fcc auctions are 'public' and 'open to anybody' really only the likes of at&t and verizon can afford the multibillion dollar price tag for licenses. and when they win those, they will make sure to charge us a fortune to use our own airwaves so they can recoup the costs.

i say write to your congressman or senator and tell them you want the fcc to stop auctioning off our precious limited bandwidth! Tell them at&t and verizon don't deserve another single Hz of frequency spectrum. Lets start using it for the internet, so nobody owns it and nobody tells us what we can or cannot say.

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