incentive-based auction

FCC meetings can be momentous occasions under the right circumstances, although it's seldom the case that we see the agency pass two potentially far-reaching measures in one sitting, like we just saw on Friday. To start, regulators have voted in favor of a proposal that will review spectrum sale rules and might drop the case-by-case determinations in favor of a more consistent screening mechanism. The reexamination will also consider a change to the ownership rules surrounding wireless frequencies that treats bands below 1GHz differently than those above -- the better to address a chorus of smaller carriers that don't like all the prime spectrum going to the companies with the most existing clout, namely AT&T and Verizon. FCC Chairman Julius Genachowski argues that reform could spur innovation through more competition, although dissenting Commissioner Robert McDowell is worried that consistent rules will somehow create "uncertainty."

Side-by-side with the review, the FCC is proposing an incentive-based reverse auction strategy to have TV broadcasters voluntarily give up their spectrum for cellular and data use. The multi-phase approach would have TV providers set the price at which they're willing to sell their spectrum to the FCC; those that just can't bear to part with their airwaves would be corralled into a tighter band range to make for larger available frequency blocks in the auction that follows. As with other FCC proposals, there's likely to be a long interval between the auction vote, the review and any definitive rulemaking, let alone an impact -- auctions by themselves can take years to play out. Still, any success with the measures could head off spectrum crunches while simultaneously preventing any solutions from consolidating too much power and creating their own problems.

[Tower photo via Shutterstock]

Filed under: Cellphones, Wireless, Mobile