FCC DELAYS UPPER 700 MHZ AUCTION UNTIL JAN., KEEPS LOWER ON TIME

Lateness of FCC decision on timing created cliff-hanger last week for both prospective bidders and groups such as CTIA that had sought delay in both bands. Upfront payment deadline of May 28 was pushed to May 30, and Commission is giving prospective bidders until May 31 to correct incomplete applications, spokeswoman said. Agency accepted 72 applications for filing in Ch. 52-59 spectrum and deemed 81 short-form applications incomplete. Prospective bidders that filed short-form applications to participate in lower band auction include Capitol Bcstg., Corr Wireless, Pappas Telecasting.

On CTIA application for review, Powell said filing that challenged Wireless Bureau decision to keep auction dates presented no issues that FCC hadn’t already considered in this proceeding. He said it wasn’t unprecedented to auction encumbered spectrum. Both Ch. 52-59 and Ch. 60-69 of 700 MHz are occupied by analog TV broadcasters, which have until Dec. 31, 2006, to vacate as part of DTV transition or until DTV penetration reaches 85%. Powell said: “The purported uselessness of these bands is belied by the number of applications the Commission has received, indicating significant interest in bidding despite the problems of incumbency… It is not clear to me why we should delay indefinitely the auction of this spectrum because of incumbency.” He said advocates of delay hadn’t put forward “credible and imminent possibility” that bands at issue would become clear. If that were case, modest delay would be warranted, he said. “I am hesitant to keep spectrum off the market indefinitely, awaiting some as-yet-unidentified solution that would greatly accelerate the transition,” Powell said: “Jawboning, voluntary agreements and hope can only get us so far.” In addition, he expressed concern that “substantial delay” might create more uncertainty about when and how band would be cleared.

Powell took wireless industry to task for making request for delay that was “inconsistent with the incumbent wireless industry’s consistent demands for additional spectrum… The parties seem to contend that these bands are not the spectrum they are really interested in (at least for now), so we should keep it on the government’s shelf (or in the hands of the analog broadcasters) until they are ready to bid on it.” He said withholding spectrum from auction “indefinitely” would create barriers to entry for new providers. Powell voiced reservations about taking actions that would contravene legislative mandates. “It should be above question that we should be conservative when being urged to push the envelope of the law, lest it contravene the will of Congress,” he said. As for upper band delay decision, he said there was “a substantial effort under way in Congress” to change aspects of auction policy and House had passed bill to delay bidding. That legislative effort “raises concerns in my mind about the destabilizing effect on the auction,” he said. But because FCC has delayed upper band auction before, that doesn’t mean that it can delay whenever it wishes without making “mockery” of statutory requirements, Powell said. On lower band, which has attracted particular interest of smaller and rural carriers, he said there were public interest benefits in moving forward. He also said legislative deadlines for that auction hadn’t yet passed.

House Commerce Committee Chmn. Tauzin (R-La.) was “disappointed” with FCC’s decision to hold part of auction, spokesman Ken Johnson said. “At best, it’s a split decision,” Johnson said: “We're gratified the FCC delayed auctioning the upper band. This spectrum is far too valuable to move forward until we have a good game plan in place.” Johnson said action would only heighten House interest in reaching compromise with Senate. “As a result of this, there'll be a lot of teeth-gnashing in the House and Senate,” Johnson said, and some members probably were waiting for FCC decision before moving for compromises.

Martin said in his separate statement, which was one of 4, that public interest would be served best by delaying both auctions “immediately.” He said FCC earlier had found it had authority to delay auctions as long as that would further its statutory mandate to design auction rules to manage spectrum in “public interest.” Martin said Commission now was in midst of other complicated spectrum proceedings, including one to identify spectrum for 3G services and another to mitigate interference for public safety users at 800 MHz. “In my opinion, we should consider these issues in a more comprehensive manner before proceeding with the 700 MHz auctions,” he said: “A delay would also allow the Commission to shed light on the considerable uncertainty concerning when the spectrum in this band will actually become available to public safety and commercial users.”

Comr. Copps called statutory directives related to timing of 700 MHz auctions “ambiguous,” saying: “I have spent many hours trying to parse their meaning and intent. Reasonable arguments can be made for proceeding forthwith or delaying the auctions.” Any conclusion by FCC would involve some sort of “interpretive stretch,” he said. Moving ahead with lower 700 MHz band auction would advance FCC’s goal of deploying rural wireless services and would “move us toward resolution of assignment questions for this band, which Congress appears to value,” Copps said. Action moving forward with Ch. 52-59 bidding has “sounder basis in statute and legislative history” than would delay of both upper and lower band bidding, he said. Comr. Abernathy called decision “far from elegant” but said it balanced conflicting statutory demands, congressional activity, sound spectrum management, public interest. She said public safety representatives had expressed support for short delay of upper 700 MHz auction. “The public safety community’s interest in delay, combined with the activity on Capitol Hill and the brevity of the delay, convinced me that we are pursuing the proper course,” she said.

Decision appeared to represent compromise to accommodate mixed signals that Commission had been getting from Capitol Hill in recent weeks. House recently passed bill by Commerce Committee Chmn. Tauzin (R-La.) that would have delayed both 700 MHz auctions indefinitely. In Senate, Sen. Stevens (R- Alaska) had proposed legislation that would direct both auctions to go forward as scheduled, while Sens. Ensign (R- Nev.) and Kerry (D-Mass.) offered bill that mirrored Tauzin’s. Speculation arose in recent days that compromise could be worked out among competing bills, although meeting of staffs of Stevens, Senate Commerce Committee Chmn. Hollings (D-S.C.) and Tauzin yielded no results earlier this week, sources said.

We applaud the Commission’s decision to delay the auction of the upper 700 MHz band, but we scratch our heads after hearing so often that only Congress could make such a decision,” CTIA Pres. Tom Wheeler said. He said Congress “may yet provide further guidance to the FCC on this important matter.” Rural Telecommunications Group Gen. Counsel Carri Bennet expressed “cautious optimism” over FCC’s decision. “They have done the best thing that they could do,” she said, and bill appeared to keep open small window for Congress still to enact change that could delay lower band bidding. She said that once bidding started June 19, she wouldn’t anticipate that Hill action could derail that auction.