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New America: Incentive Auction Bidding Limits Are Pro-Competition

New America Foundation hosted a briefing in Washington Wednesday in which it argued that the FCC has the authority and duty to set spectrum limits on wireless carriers in order "to ensure that the upcoming broadcast incentive auction maximizes competition and innovation in the wireless industry."

The FCC is scheduled to vote May 15 on a proposal to set such limits in order to insure that low-band spectrum up for auction is not concentrated in the hands of AT&T and Verizon, which already hold the majority of that spectrum.

AT&T and Verizon say its competitors are companies with plenty of money and opportunity to bid on that spectrum in an open auction without the limits they argue could lower the take and discourage their participation.

But competitive carriers and public interest groups assembled for the pitch on competitive auctions said that aggregation limits were necessary and appropriate.

Michael Calabrese, who directs the Wireless Future Project at New America's Open Technology Institute, said that the FCC's proposal to set aside some low-band spectrum for carrier who don't have at least a third of the low band spectrum in a market was hardly a severe limitation on participation in the auction and that AT&T and Verizon were looking to foreclose competition.

Chip Pickering, president of Comptel, evoked one of FCC chairman Tom Wheeler's favorites, Abe Lincoln, in saying that a score years ago when competitive auctions were created, have since spurred investment and innovation and should not be allowed to perish from the earth by duopolists looking for foreclose that competition.

Steve Berry from the Competitive Carriers Association, commended Wheeler for keeping his eye on the "bouncing ball" and said the auction framework was conceptually sound and will allow every bidder to bid on spectrum. But he added it was critical for every carrier to get access to the 600 MHz "ecosystem."

Mark Cooper, from the Consumer Federation of America, said the FCC had come up with a simple and ingenious approach to spectrum auction that balances multiple objectives. He took the opportunity to warn broadcasters unhappy with the auction framework that this might be as good as it gets in terms of auctions. He called the auction "outrageously friendly" to broadcasters, citing a range of choices broadcasters have, including taking the money and running or taking it and still having spectrum (spectrum sharing). "How is it going to get any better," he asked.

Cooper said that if not enough of them participate and the Congress is forced to come up with new auction legislation, it will likely not be nearly as friendly to them. He said that the world needs spectrum and he would not be surprised if Congress was forced to step in if not enough broadcasters participated.