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Justice Says FCC Needs to Finesse Spectrum Screen

The Justice Department says the FCC should come up with some
"competition-focused" rules on spectrum acquisitions, particularly
auctions, including taking into account the differing propagation qualities of
different spectrum bands that make one more valuable than another.

That came in comments to the FCC on mobile spectrum
holdings. The FCC is looking to come up with rules for the broadcaster
incentive auction that promote wireless participation by both large and small
carriers. Separately, it has asked more broadly if it should adopt a new
approach to how it determines the appropriate level of spectrum concentration
in individual markets.

Justice says that given that all spectrum is not created
equal, the FCC should take a nuanced approach. For example, "the
propagation characteristics of lower frequency spectrum permit better coverage
in both rural areas and building interiors," Justice said in its filing,
the reason broadcast spectrum is so attractive to the wireless industry.
"A carrier's position in low-frequency spectrum may determine its ability
to compete in offering a broad service area, including its ability to provide
coverage efficiently in rural areas."

As a result, it said, "the Department concludes that
rules that ensure the smaller nationwide networks, which currently lack
substantial low-frequency spectrum, have an opportunity to acquire such
spectrum could improve the competitive dynamic among nationwide carriers and
benefit consumers."

DOJ is primarily concerned that large carriers not be able
foreclose competition by concentrating spectrum, including to deny it to
competitors (hoarding).

The FCC voted last September to review its spectrum screen,
which potentially limits -- it triggers additional scrutiny -- the amount of
mobile wireless spectrum any one company can own in a market.

While FCC chairman Julius Genachowski said it was a needed
review, there was major pushback from Republican commissioners, concerned that
any tightening of that screen or capping of holdings or move away from the
current case-by-case determination could negatively affect participation in the
broadcast spectrum incentive auction.

The FCC was seeking comment -- the notice included no
tentative conclusions -- on a number of things, including "whether the
Commission should make distinctions among bands in assessing spectrum
holdings." Justice clearly thinks it should.

Public Knowledge, which is equally concerned
about anticompetitive spectrum policies, welcomed the Justice input. "[I]t
is gratifying to see the DOJ take such a strong stand in favor of competition
and against the wireless status quo," said John Bergmayer, senior staff
attorney at Public Knowledge.