More Incentive Auctions on Their Way Even If First Didn't Meet Expectations, O'Rielly Says
“The jury is still out” on whether the TV incentive auction will be considered a success, but more incentive auctions are likely on the way regardless of the final numbers, FCC Commissioner Mike O’Rielly said Tuesday in remarks at a Politico Live 5G event. O’Rielly predicted that Congress will look to do another auction in the “near future” to get more budget offsets. Spectrum auctions are one of the easiest places for Congress to look for funds, he said. “In every budget negotiation that I was part of, spectrum was part of the conversation,” said O’Rielly, a former Hill staffer.
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“Congress provided a very strong statute -- I happened to work on it, so I’m a little biased,” O’Rielly said. Congress’ goal in the Middle Class Tax Relief and Job Creation Act was to free up spectrum from broadcasters willing to move or get out of the business, he said. “I think we did a fairly good job of getting there,” he said. The FCC initially tried to sell broadcasters on the idea they could get as much as $90 billion for their spectrum, but the actual numbers are far below that level, he noted. The auction brought in $19.3 billion in bids, before the start of the assignment phase Monday.
O’Rielly said he looks forward to seeing the data on the auction when it's released after the sale concludes. But he said another broadcast auction seems likely. “It doesn’t mean that we’re talking about next year, it can be 10 years from now,” he said. Some broadcasters decided not to sell at the prices in this auction, he said. “In 10 years the prices may be different, the band may be different,” he said.
O’Rielly predicted the FCC will make some changes to the rules for the 3.5 GHz shared band. Parts just aren’t “workable,” especially the licensed part of the band, he said. “I think it’s kind of broken right now,” he said. “I think we need to improve some of the licensing structures.” O’Rielly said he disputes the Obama administration's view that sharing is the only way to find new spectrum for wireless broadband. Sharing “won’t be the only mechanism going forward,” he said.
O’Rielly didn’t forecast when the FCC might make a decision on sharing the 5.9 GHz band between auto safety technologies and Wi-Fi. The 5.9 GHz band is an important band for Wi-Fi, but FCC testing continues on sharing, he said. “I think you can do both and I think that’s what the technology tests will prove, but we’ll have to see how that plays out,” he said.
Asked about a proposal to “rechannelize” the band to separate unlicensed use dedicated short-range communications (DSRC) technology designed to curb crashes, O’Rielly said he's open minded. “I think that’s definitely on the table,” he said. “It’s something that I’m looking very closely at and I find that that may be a better way to go.” A decision probably took longer than necessary, but the band appears to be a “high priority” for new Chairman Ajit Pai, O’Rielly said. “It’s going to be a high priority for me,” he said.
The FCC should do more to push faster siting of wireless facilities, O’Rielly said. Americans clearly want better broadband deployment, he said. Even in the most densely populated areas of the U.S. “we’re having difficulty by some communities that are bad actors,” he said. Getting local approvals and the cost of those approvals are issues, he said. Some local governments “want to impose exorbitant fees that make no sense,” he said.
Some local governments think a small cell should be treated the same as traditional cell towers, O’Rielly said. “That’s not going to make any sense economically,” he said. “We’re going to have to address that in my opinion.” The FCC has to find ways to push some communities to make faster siting decisions “and I’m comfortable doing so,” he said. Local communities want faster broadband but oppose siting new wireless facilities for aesthetic and other reasons, O’Rielly said. “Something has got to give,” he said. “My job is to try and provide access to broadband to as many people as possible.” O’Rielly said in some cases pre-emption is the only solution and he hopes the FCC will move forward this year to speed up siting. He noted that the FCC already has before it a Mobilitie petition asking the agency to pre-empt state and local authority over rights of way (see 1703070013).
O’Rielly also said he favors putting more pressure on federal agencies to be more efficient in how they use spectrum. One solution is to impose costs on agencies for the spectrum they use, even if that cost is lower than the marketplace value, he said. “We don’t give [agencies] free pens, we don’t give them free cars,” he said. “We shouldn’t have a mechanism where they have free spectrum.” By imposing costs, agencies would realize they don’t need as many frequencies as they have, he said. The “biggest holder by far has been the Department of Defense,” but agencies like DOJ also use large amounts of spectrum, he said. “I don’t want to undermine their mission in any way,” he said. “But I think we can do both. We can make them more spectrally efficient and make sure they can still do their mission. It is not an either/or in my opinion.”
O’Rielly said he in general supports a wireless carrier push to make more high-frequency spectrum available for licensed use. The U.S. will need more unlicensed and shared spectrum as well, “but I do believe in licensed spectrum,” he said. “I think there is a need for additional licensed spectrum. It provides the certainty that industry needs to invest.”