Verizon Sues FCC Over 700-MHz Auction Rules

Verizon Communications filed suit in the D.C. court against the Federal Communications Commission over its rules for auctioning of spectrum being reclaimed from broadcasters in the switch to digital, calling those rules arbitrary and capricious and saying the agency exceeded its authority.

The FCC voted six weeks ago to make a block of that 700-megahertz spectrum large enough for a new national wireless service subject to open access conditions.

The auction has to begin by January 2008 by order of Congress.

Those open-access conditions would allow consumers to attach a variety of devices to any national wireless service employing the spectrum. That would represent a break from the model of Verizon and others that effectively bundle their service with a particular handset -- think AT&T and iPhone.

A lawsuit could throw a monkeywrench into the timetable for the digital-TV transition, since money from that auction -- estimated at $10 billion-$15 billion -- is being used to fund the subsidy program for DTV-to-analog converter boxes so that analog-only sets can still receive an over-the-air picture after the digital transition. Some of the money is also being used to fund first-responder communications.

National Telecommunications & Information Administration chief John Kneuer, who has to oversee the converter-box program, has already started spending some of the money, which is to be deposited in the treasury by next June.

The FCC would not comment on pending litigation.

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.