Genachowski Spectrum Screen Explanation Fails to Comfort House Commerce GOP
The House Commerce Committee wasn’t satisfied by the FCC’s explanation for using an adjusted spectrum screen in its review of the recently failed AT&T/T-Mobile transaction. Chairman Fred Upton, R-Mich., and Communications Subcommittee Chairman Greg Walden, R-Ore., last month questioned the FCC process (CD Dec 8 p2) behind the change, as well as the decision to release a staff report about the deal after AT&T and T-Mobile withdrew their application. In a letter dated Dec. 20 and released last week, FCC Chairman Julius Genachowski replied that no formal rulemaking is required to change the spectrum screen, and that it would have been inappropriate to “suppress the completed [staff] report.”
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"The FCC’s response underscores the ad hoc nature of how the spectrum screen is reassessed and used,” said a GOP spokeswoman for House Commerce. “This is just one example of many where the FCC is not entirely transparent or predictable to the public and those it regulates. That’s why the committee plans to move forward in the New Year with process reform legislation to build on and cement the efforts by Chairman Genachowski and others to make the FCC a more open and accountable government agency.” A committee markup of FCC process reform legislation was scheduled for December but postponed. The spectrum screen issue is expected by some agency officials to surface again as the FCC reviews the Verizon/SpectrumCo transaction.
The FCC’s first spectrum screen in 2004 “was done without a formal rulemaking process,” Genachowski wrote. “And each adjustment to the original spectrum screen has occurred during the course of a transaction review, where parties have commented on potential changes to the screen. This approach -- which relies on case-by-case analysis rather than formal rulemaking -- has been consistently applied by the Commission since 2004. It has been widely regarded as sensible because it enables the Commission to use the most current data available to determine what spectrum should be considered in the screen.” Stakeholders know to file comments on the screen during transaction reviews, he said. “This case-by-case approach leads to extensive, timely, and relevant public comment. The alternative risks creating unnecessary process and burdens on interested parties."
A spectrum screen is triggered “when a transaction would aggregate more than approximately one-third of the spectrum suitable for the service at issue … in a particular market in the hands of one entity,” Genachowski wrote. “Where there are significant changes in the marketplace that affect the practical availability of spectrum, such as new rules, standards adjustments, or an intervening spectrum auction, the Commission adjusts its screen accordingly.” The screen doesn’t weigh the propagation or capacity characteristics of spectrum bands, but it does consider whether they are suitable for mobile telephony or broadband, he said.
Explaining the release of the staff report, Genachowski said it was unprecedented for parties “to withdraw license transfer applications following the circulations of a proposed Commission decision while continuing to pursue the same transaction.” AT&T and T-Mobile’s original transaction applications triggered “a significant transaction review process,” consuming “substantial public and private resources,” he said. “Releasing the report promotes fairness and transparency to the public, the participants in the proceeding, and all interested parties.” Unlike the draft order, the staff report was “final and intended for release,” Genachowski added.