NTIA URGES FCC TO REPEAL WIRELESS SPECTRUM CAP IMMEDIATELY
Bush Administration weighed in for first time on wireless spectrum cap Wed., with NTIA Dir. Nancy Victory urging FCC Chmn. Powell to enact “full and immediate repeal.” In detailed letter, she told Powell that retention of limits wouldn’t preserve competition but would “more likely result in consumer harm.” Letter came as FCC was set to review continued need for wireless spectrum cap by year-end, with issue expected to be on agenda for Nov. 8 Commission meeting. Cap for commercial mobile radio service (CMRS) operators now is set at 45 MHz for most markets and 55 MHz in rural areas. Administration also urged Commission to do away with cellular cross-interest rules. “Given the current vigorous level of competition in the CMRS marketplace, the existence of other mechanisms to safeguard against anticompetitive activity and detrimental consolidation, and the potential consumer harms if the rules are left in place, prompt repeal is not only warranted but required,” Victory said.
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Several sources said FCC Wireless Bureau recommendation now circulating on 8th floor would lift cap to 55 MHz for all markets for 12-18 months, then roll it back completely. After “sunset date” on which cap would expire, guidelines would be put in place for how transactions would be evaluated at agency in absence of cap, sources said. House Commerce Committee Chmn. Tauzin (R-La.) and Telecom Subcommittee Chmn. Upton (R-Mich.) also urged Powell this month to do away with cap, calling it “antiquated” (CD Oct 15 p4). While NTIA occasionally weighs in on such issues at FCC, it’s selective as to proceedings on which it chooses to comment, so Administration’s selection of spectrum cap as important issue was significant, one source said.
Commerce Secy. Donald Evans said Wed. that cap was “arbitrary and outdated. Technology must be free to advance as fast as the market demands. The words ‘all circuits are busy’ need to be retired alongside other relics of the Industrial Age and replaced by the opportunities and innovations that consumers have come to expect in the 21st century.” NTIA spokesman said Victory wasn’t available for comment Wed. afternoon.
In letter to Powell, Victory said spectrum cap and cellular cross-ownership rules might have served important purpose when they were adopted but market since had changed. “In today’s CMRS market, characterized by multiple national providers and numerous local carriers, rules such as these that draw arbitrary lines in the name of ensuring competition are simply not needed,” Victory wrote. Constraints on system capacity imposed by rules “limit service availability as well as stifle the deployment of innovative new offerings on the CMRS networks.” Most metro areas have more than 4 mobile wireless carriers and many have more than 6, she said. Victory also contended that removing rules wouldn’t leave CMRS market “susceptible to anticompetitive behavior or harmful consolidation.” She said both Justice Dept. and FCC had mechanisms to review and address consolidation proposals that were anticompetitive. “Indeed, as the primary enforcer of the antitrust laws, the DoJ routinely reviews communications transactions for harmful competitive effects.” FCC also undertakes similar analysis when it reviews transactions for public interest factors, she said. “These safeguards are more than sufficient to protect against future anticompetitive conduct or consolidation that threatens the public interest.”
Victory also argued that spectrum restrictions discouraged offerings of new services over existing wireless networks. Faster Internet surfing options could be rolled out on current networks, but “given current system saturation levels and the fact that such new services tend to require more spectrum than traditional services, many carriers are discouraged from doing so,” she said. Repeal of cap also would allow more “reliable call completion and the delivery of new services,” she wrote. Letter also was sent to other commissioners and Wireless Bureau Chief Thomas Sugrue.
CTIA, which has been urging FCC to remove cap to alleviate capacity concerns of its member, lauded Administration’s stance. “Like today’s wireless networks, the Administration’s signals have been strong and clear: Remove the spectrum caps and allow free and unfettered competition to rule the mobile market,” CTIA Pres. Tom Wheeler said. He called Administration’s policy outlines “bold” position. Several large carriers also praised NTIA letter. “We are strongly supportive of the elimination of the spectrum cap, in whatever time frame that is being considered right now,” Verizon Wireless spokesman said. “At the end of that limited period, a lifting of the cap needs to occur. What people call lifting the cap needs to pass the straight-faced test,” he said. Cingular Wireless Vp-Federal Relations Brian Fontes said, “Clearly we were pleased with Secretary Evans and Nancy Victory reflecting the Administration’s viewpoint on spectrum caps and we recognize the Commission may be addressing this issue” soon.