Markey Upbeat on Martin 700 MHz Plan; Not GOP

Martin said a coalition of companies backing a national wireless broadband alternative urged the Commission to set up the auction to promote the emergence of a national wireless broadband service. This would include making available at least one 11 MHz paired block offered over large geographic areas with combinatorial bidding, allowing establishment of a national service. That would offer small and rural providers “significant opportunities,” Martin said. The proposed band plan would provide for a variety of geographic license areas and spectrum block sizes, he said.

The plan includes “stringent build-out requirements -- the strictest build-out the Commission has ever proposed” to help ensure that rural and underserved parts of the country get new services, Martin said. Requirements would include interim benchmarks and “tough” penalties. Higher power would be allowed in rural areas, reduce need for towers and cutting build-out costs, Martin said. The plan would set aside a third of the spectrum for a platform “more open to devices and applications,” the chairman said. Such a platform could allow consumers to use the wireless devices of their choice.

“The upcoming auction provides a rare chance to promote a more open platform without disrupting existing networks or business plans,” Martin said. “To be clear, I have not, however, proposed to apply these same principles to the entire 700 MHz band or to other existing networks. Nor have I proposed to apply network neutrality obligations, unbundling or mandatory wholesale requirements for this block or any other block.” Martin said he has proposed a “reserve price” for the spectrum with open platform potential, as well as a reserve price for the entire auction. If the reserve prices aren’t met, the spectrum would be auctioned again with no requirements for open devices or applications.

Many Republicans and some Democrats expressed dismay at Martin’s plan to put conditions on the auction, which they said would sap revenues. The plan is “not quite as bad as Frontline but not as good as no conditions,” said Commerce Committee Ranking Member Joe Barton, R-Tex., referring to a public-private partnership vying for spectrum for a commercial network committed to build a national interoperable network. Barton said he understands Martin has the votes to pass his plan but added, “Today’s hearing may lead to some changed votes.”

“I urge the Commission to review these rules and policies and open the auction to a market that will utilize the spectrum most efficiently,” said former House Speaker Dennis Hastert, R-Ill. “This is the only way the auction will proceed on schedule.” Said Rep. Eliot Engel, D-N.Y. “I would encourage the Commission to generate the most amount of revenue as possible.”

Interoperability Opportunity

Martin’s plan also calls for a national public safety network to be built by a public-private partnership, with a national commercial licensee collaborating with a national public safety licensee. This would help the Commission ensure that public safety keeps pace with advances in communications and gives first responders the broadband capabilities they need. This part of Martin’s plan was generally well received by most lawmakers.

“Improving communications interoperability should be a priority as the Commission completes the rules,” said House Commerce Committee Chairman John Dingell, D-Mich. “This is a crucial issue for the public safety community.” The FCC has an “historic opportunity” to fix a long-standing problem, said Rep. Jane Harman, D-Calif. The public-private partnership idea is sound and an opportunity that will not come again soon, she said. Without the public-private option, “we will end up with very pricey networks all around the country,” Harman said.

FCC Commissioner Michael Copps told the subcommittee his first preference would have been a federally funded nationwide interoperable broadband network for first responders. But that won’t happen now, so the public-private model is a reasonable compromise. “The challenge is to make sure that this network actually works for public safety,” he said, adding that it should be built to public safety’s standards and not controlled by commercial decisions. FCC involvement must be strong and ongoing, Copps said.

Google’s Proposal

Martin expressed concerns about Google’s proposed wholesaling requirement, one of the four conditions the company put on its offer to bid $4.6 billion in the 700 MHz auction. Martin said several times in response to lawmakers’ questions that his goal is to devise a way to benefit public safety and consumers, not to fit a particular company’s business model. “The proposal I've put forward isn’t designed to favor any one company,” he said.

“This smacks of corporate welfare,” Rep. Marsha Blackburn, R-Tenn., said of Martin’s plan. In a related move, Verizon Executive Vice President Tom Tauke responded to a letter to Google sent to the FCC about the auction proposal. Tauke said Google is trying to “get spectrum at a bargain basement price” and attempting to turn a “carefully considered plan on its head” by urging the FCC to adopt rules that would discourage other bids. “The bottom line is this: without Google’s rules, the government will get literally billions more for this valuable spectrum, and the taxpayers will be the winners,” he said.

Separately, the 700 MHz item is unlikely to be on the July meeting agenda unless all commissioners “go back and vote on it today -- if they've all figured out what the answers are,” Martin told reporters Tuesday after the hearing. Martin also said he favors blind bidding and seems to have the votes to win. But, he said, he lost an effort to impose such rules in the last auction. At our deadline, the agenda had not been released yet.