Auction 97 – More Lessons
For Future Auctions

Posted by: Joan Marsh on March 4, 2015 at 1:36 pm

Additional reactions to Auction 97 are emerging with everyone putting their own spin on the results.

First, in a blog, T-Mobile offered its view, calling the auction a disaster for U.S. consumers.  Hard to figure how they can reach that result.  The auction reallocated 50 MHz of valuable paired spectrum to the wireless industry – an allocation that T-Mobile itself has long advocated for.  The spectrum is internationally harmonized and is already being standardized so it can be efficiently deployed to bring substantial additional data capacity to U.S. wireless consumers.  And the auction proceeds will fully fund FirstNet, so the country will finally realize the promise of an interoperable public safety broadband network.  These are all wins for the FCC, the wireless industry and the American public.

The Public Interest Spectrum Coalition also offered its own lessons, oddly casting the Dish entities as victims of the “continued dominance” of other bidders. But to believe them, you have to ignore the fact that the Dish entities won more licenses than any other bidder in the auction and have laid claim to a $3B subsidy from American taxpayers to boot.

Any serious analysis of the auction must be based on the facts of what actually happened in the auction – not fiction and not bluster about “twin bell” monopolies.  Consider this an addendum to my last blog, with more lessons from the auction.

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Thoughts on Today’s Vote

Posted by: Jim Cicconi on February 26, 2015 at 11:52 am

Perhaps I’m betraying my years, but in Washington policy circles there has always been tension between those interested in solving problems and those who see policy disputes as a test of ideology.  I’d readily admit falling into the former camp, and have the policy scars to prove it.  To be sure, one must have principles and a philosophy of government’s proper role.  But a democracy cannot function when either side lapses into rigidity.  Or worse, when political advantage becomes more important than the nation’s best interest.

In our little world, and in my decades of interaction with it, I’ve felt, and still feel, that the FCC has tried to stay focused on solving problems and avoided turning issues into dogma.  Every chairman in my memory, including the current one, has faced political stampedes of one sort or another.  Yet the agency has always tried to find a middle ground and a consensus win.  They’ve understood that a win, unlike a fight, is the product of reaching out to both sides, and working in a bipartisan way to find a solution.  A win is the product of compromise, thoughtful policy, and a genuine desire to find the answer to a complex set of issues.

We had such a situation – and a bipartisan win – in the 2010 net neutrality rule.  Unfortunately, this was undone by a court decision, facing us with the same situation a second time.  Today, an Administration and an FCC that appeared headed toward another bipartisan win on net neutrality were driven instead to a partisan fight.  The 3-2 FCC vote, along party lines, for sweeping new regulation of the Internet, is a rejection of the compromise win and an embrace, however reluctant, of the political fight. It’s unfortunate that this single issue, more than any other, has over the course of ten years caused a divisive spirit to spread to an agency that has long sought unanimity on significant long term issues, and generally found it.  A 5-0 decision doesn’t leave a lot of room for either side to continue the argument, while a 3-2 decision, particularly on issues of such broad scope, is an invitation to revisiting the decision, over and over and over.

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Lessons from Auction 97
For Future Auctions

Posted by: Joan Marsh on February 20, 2015 at 10:20 am

The quiet period on Auction 97 lifted last Friday opening the period of dialogue around the most successful – and surprising – auction in the history of the FCC.  Much has already been written on the unexpected valuations and revenue raised.  I want to turn to some of the lessons to be learned from this auction, and how those lessons can and should be applied to future auctions.

Lesson No. 1 – It’s all about Capacity

This was the first FCC auction of the modern capacity era.  The last major auction took place in 2008 (Auction 73), barely one year after introduction of the iPhone and at the beginning of the now well-recognized wireless data revolution.  In the lead-up to the auction, the general thinking was that this was mid-band spectrum made even less interesting because of encumbrances in the uplink.  The FCC set a reserve price of $10B and some privately worried that that might be too high.  I know of no one who publicly predicted that the auction would exceed even $20B in revenue.

How did everyone miss it?  The mistake was in thinking that there would be only limited interest in this spectrum band. The fact is that this auction of mid-band spectrum represented an important opportunity for market participants to add depth to their spectrum portfolio and network capacity necessary to meet ever rising demands.  Indeed, 70 bidding entities were qualified to participate and 31 won licenses – hard evidence that there is significant continuing interest in licensed spectrum.  And it didn’t matter that it was mid-band spectrum. It mattered only that it was broadband spectrum.

Lesson No. 2 – Because it’s about Capacity, Auctions should Enable Those That Invest in Infrastructure

One of the biggest surprises was that Dish, working through two designated entities (DEs), won more licenses than any other bidder.  Post auction, Dish’s spectrum portfolio in the top 100 CMAs will, on average, be 81 MHz deep.  Yet none of that spectrum is currently supporting commercial wireless services.

Given the demands being placed on wireless networks today, the industry simply cannot afford to have significant spectrum resources sitting idle on the sidelines.  Auctions should be designed to ensure that licenses go to those willing to deploy networks – not speculators or stockpilers.  The FCC has continued to strengthen build requirements but perhaps more is needed to ensure that new capacity is put to use quickly for American consumers.

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AT&T Statement on the Introduction of the Law Enforcement Access to Data Stored Abroad (LEADS) Act

Posted by: AT&T Blog Team on February 12, 2015 at 3:11 pm

The following statement may be attributed to Tim McKone, AT&T Executive Vice President of Federal Relations:

“AT&T applauds Senators Hatch, Coons and Heller, and their staff members, on their continued efforts to ensure customer privacy is protected when government officials seek information stored outside of the U.S. The privacy of AT&T’s customers around the world is of paramount importance to us.  AT&T looks forward to working with the Senators and the entire Congress on these types of privacy safeguards as the bill moves forward.”

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AT&T Statement on FCC Chairman Wheeler’s Net Neutrality Proposal

Posted by: AT&T Blog Team on February 4, 2015 at 2:44 pm

Attribute the following to AT&T Senior Executive Vice President-External and Legislative Affairs Jim Cicconi:

“We continue to believe that a middle ground exists that will allow us to safeguard the open Internet without risk to needed investment and years of legal uncertainty. We were able to find such a path in 2010, and will do our very best to seek such a path today. We also hope that proponents of Title II will consider that any FCC action taken on a partisan vote can be undone by a future commission in similar fashion, or may be declared invalid by the courts. The best way to ensure that open Internet protections, investment and innovation endure is for people of good faith to come together on a bipartisan basis for that purpose. We believe such an opportunity exists today.”

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