eligibility restrictions

CBIT White Paper: The Broken Promise of the 2.5 GHz Band

Posted by | Wireless | One Comment

Click here to download the white paper in PDF.

Repurposing Educational Spectrum Resources to Connect America’s Schools and Libraries to Next Generation Internet Services

Executive Summary

A 2010 survey commissioned by the Federal Communications Commission (FCC) found that nearly 80% of schools and libraries in the United States lack Internet connectivity that fully meets their current needs. In response, President Obama proposed the ConnectED initiative to provide 99% of American schools and libraries with Internet connectivity at speeds no less than 100 Mbps within the next five years. Most of the funding for this initiative is expected to come from universal service funds administered by the FCC through it E-rate program.

The current level of E-rate funding is far too limited to meet the President’s goal, however, and a substantial increase in universal service funding would threaten the affordability of broadband services in rural areas and to low-income communities. These public interest constraints have prompted the FCC to ask the public for help in identifying additional sources of funding for educational broadband.

Strangely, the FCC has ignored an obvious source of at least $11 billion in educational funding for which the FCC already has ultimate authority: The 117.5 MHz of spectrum allocated for the Educational Broadband Service (EBS) in the 2.5 GHz band. This spectrum was allocated for education over 50 years ago, but has never been fully utilized for its intended purpose. During the last two decades, the FCC permitted Sprint to lease nearly all of this educational spectrum from our schools and use it almost exclusively for Sprint’s commercial purposes. Though Sprint has a legal obligation to provide 5% of the spectrum’s broadband capacity for use by schools holding 2.5 GHz spectrum licenses, a recent study indicates that Sprint is not meeting even this minimal obligation in good faith. Read More

H Block Auction Shows Need for Clearer Limits on FCC Spectrum Authority

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This post was originally published by FierceWireless here.

The Federal Communications Commission declared the auction of spectrum in the H block “successful” because (1) it licensed spectrum that could be used to provide mobile wireless service to the public, and (2) it “raised $1.564 billion from spectrum that used to be viewed as almost worthless.” In truth, however, the H block auction was a failure.

Though the auction did license spectrum in exchange for payment, that is not the criteria for a successful spectrum auction — virtually all spectrum auctions would meet this criteria, including the obviously failed C block auction in the PCS band.

To be truly successful, an auction must fulfill the fundamental purpose auctions are intended to serve. Congress authorized the use of “competitive bidding” to assign spectrum to the applicant who values it most highly, who is presumed to be the applicant most likely to provide quality service to the public in a timely manner, while minimizing rent seeking and transaction costs. An auction can serve this purpose only if it actually results in competitive bidding, which is why Congress prohibited the FCC from selling spectrum in the absence of competing applicants.

Based on bidding data and the unusual circumstances surrounding the adoption of its reserve price, the H block auction bears more resemblance to an impermissible “retail sale” of spectrum at a pre-determined price negotiated by the FCC than a “system of competitive bidding” designed to determine which applicant values the H block most highly. As I’ve previously explained in detail, the FCC illegally established an artificially high reserve price of $1.564 billion for the H block as part of a pre-auction bargain with DISH Network, who had committed to pay this price only if the FCC increased the value of DISH’s spectrum holdings in other bands. The FCC granted DISH’s wish, and a result, DISH “won” all of the H block licenses. Read More

Maximizing the Success of the Incentive Auction

Posted by | Public Safety, Wireless | 2 Comments

I prepared a report for the Expanding Opportunities for Broadcasters Coalition and Consumer Electronics Association entitled Maximizing the Success of the Incentive Auction, which was filed at the Federal Communications Commission on November 4, 2013. The executive summary is reprinted below and the full paper can be viewed here. Read More

Dick Thornburgh Is Mistaken: The New DOJ Spectrum Recommendation Is Inconsistent with Its Prior Approach to Mobile Competition

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The Department of Justice has suddenly reversed course from its previous findings that mobile providers who lack spectrum below 1 GHz can become “strong competitors” in rural markets and are “well-positioned” to drive competition locally and nationally. Those supporting government intervention as a means of avoiding competition in the upcoming incentive auction attempt to avoid these findings by highlighting misleading FCC statistics, including the assertion that Verizon owns “approximately 45 percent of the licensed MHz-POPs of the combined [800 MHz] Cellular and 700 MHz band spectrum, while AT&T holds approximately 39 percent.”

Sprint Nextel Corporation (Sprint Nextel) recently sent a letter to the Federal Communications Commission (FCC) signed by Dick Thornburgh, a former US Attorney General who is currently of counsel at K&L Gates, expressing his support for the ex parte submission of the Department of Justice (DOJ) that was recently filed in the FCC’s spectrum aggregation proceeding. The DOJ ex parte recommends that the FCC “ensure” Sprint Nextel and T-Mobile obtain a nationwide block of mobile spectrum in the upcoming broadcast incentive auction. In his letter of support on behalf of Sprint Nextel, Mr. Thornburgh states he believes the DOJ ex parte “is fully consistent with its longstanding approach to competition policy under Republican and Democratic administrations alike.”

Mr. Thornburgh is mistaken. The principle finding on which the DOJ’s new recommendation is based – that the FCC should adopt an inflexible, nationwide restriction on spectrum holdings below 1 GHz – is clearly inconsistent with the DOJ’s previous approach to competition policy in the mobile marketplace. Both the FCC and the DOJ have traditionally found that there is no factual basis for making competitive distinctions among mobile spectrum bands in urban markets, and the DOJ has distinguished among mobile spectrum bands only in rural markets. Read More

DOJ Spectrum Plan Is Not Supported by Economic Theory or FCC Findings

Posted by | Public Safety, Wireless | One Comment

Frontline relied on the DOJ foreclosure theory to predict that the lack of eligibility restrictions in the 700 MHz auction would “inevitably” increase prices, stifle innovation, and reduce the diversity of service offerings as Verizon and AT&T warehoused the spectrum. In reality, the exact opposite occurred.

The DOJ recently recommended that the FCC rig the upcoming incentive auction to ensure Sprint Nextel and T-Mobile are winners and Verizon and AT&T are losers. I previously noted that the DOJ spectrum plan (1) inconsistent with its own findings in recent merger proceedings and the intent of Congress, (2) inherently discriminatory, and (3) irrational as applied. Additional analysis indicates that it isn’t supported by economic theory or FCC factual findings either. Read More

How to Rig an FCC Spectrum Auction in 5 Easy Steps

Posted by | Wireless | 2 Comments

Tomorrow the Federal Communications Commission (FCC) is testifying at a House Energy and Commerce Committee oversight hearing on spectrum auctions. The hearing is focused on the implementation of the broadcast incentive auction required by the Middle Class Tax Relief and Job Creation Act of 2012 (“Spectrum Act”), though the members will likely address other issues as well, including mobile spectrum aggregation.

I expect several questions regarding the FCC’s commitment to comply with the legislation as enacted by Congress. FCC Commissioner Ajit Pai has questioned whether several of the agency’s proposals in its auction proceeding are consistent with the Spectrum Act. The FCC’s recent proceeding to consider mobile spectrum aggregation has since raised troubling new questions regarding the agency’s willingness to comply with Congressional directives regarding spectrum auctions. If the FCC adopts new limits on spectrum holdings as suggested by its mobile competition reports, Verizon and AT&T would be prohibited from bidding in the incentive auction. Contrary to Congressional intent, the incentive auction would be rigged before it even begins.

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FCC Chairman Genachowski Praises Predecessors’ Smart Policies, but Will He Heed Them?

Posted by | Broadband Internet, Wireless | No Comments

If the FCC had adopted the eligibility restrictions proposed by PISC in 2007, the United States would not have achieved the LTE leadership touted by current FCC Chairman Genachowski.

I was pleased to see FCC Chairman Genachowski praise the market-based policies of his predecessors in his remarks at Vox last week. He noted that the United States is currently leading the world in next generation mobile wireless services with 69 percent of the world’s LTE subscribers, which he attributes to “smart government policies.” He didn’t mention, however, that the “smart government policies” that led to America’s renewed mobile leadership were based on market principles adopted by the previous FCC.

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