The FCC under Chairman nominee Tom Wheeler should make it a point soon after Wheeler and Michael O'Rielly are sworn in to lay out its view of how competition should be regulated, said ex-Chairman Reed Hundt during a Technology Policy Institute panel Tuesday. “Adopting a fundamental competition policy is one of the first orders of business for the new commission.” In a paper (http://stanford.io/16KZBGr) referenced repeatedly at the event, he said the FCC should let the market work, but be ready to step in with regulation to address bottlenecks and protect competition as needed (CD Sept 30 p11). AT&T Senior Executive Vice President Jim Cicconi said the commission should focus instead on large communications policy projects like the IP transition and the incentive auction. “Where I get nervous is when the FCC tries to operate like a mini antitrust agency,” said Cicconi. “They're not the expert agency when it comes to antitrust and competition."
As Columbus Day approaches, the Senate hasn’t approved the two FCC nominees. The government shutdown has hurt the ability of the FTC and others to carry out their responsibilities, said Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., in a report from the committee majority staff (http://1.usa.gov/1atWQYB). He released the report Friday in conjunction with a committee hearing on the economic effects of the shutdown, which mentioned the slowdowns at the FCC and FTC. Both agencies await Senate confirmation of pending nominees, a process delayed by the shutdown.
AT&T and T-Mobile executives are frustrated by government shutdown, now well into its second week, they said at the Telecommunications Industry Association conference. The FCC’s work on spectrum auctions, getting spectrum from the Department of Defense, the broadcaster incentive auction -- “all that work has stopped,” said Thomas Sugrue, senior vice president-government affairs for T-Mobile. “One week? Sure, we can all make that up,” he said. “But once it gets a second week, and if we're talking about a third, there could be some real negative impacts on the timing of that.” T-Mobile is “fortunate that we don’t have an intensive, major deal pending,” like AT&T’s bid to acquire Leap Wireless, Sugrue said.
New product introductions are in danger of being delayed by the government shutdown, TIA officials told us Tuesday. Products by TIA members need certification from FCC-approved telecommunication certification bodies (TCBs), but those labs can’t submit their reports to the now-shuttered FCC websites for ultimate approval. Without FCC approval, manufacturers can’t ship their products. “No new devices of any kind that need FCC approval can be marketed in the U.S. until the shutdown ends,” TIA General Counsel Danielle Coffey said.
In a new paper on regulation for the digital age, former FCC Chairman Reed Hundt says the agency needs to embrace a “modern” regime of light-handed regulation, but that a “laissez-faire” regime will work only some of the time. The paper was co-authored by Greg Rosston, former FCC chief economist, now a professor at Stanford University.
House Minority Leader Nancy Pelosi, D-Calif., appointed Rep. John Yarmuth, D-Ky., to the House Commerce Committee Tuesday. The House Democratic Steering & Policy Committee approved the recommendation, and the House Democratic Caucus still has to sign off on Yarmuth’s appointment before he starts, Pelosi’s office said (http://1.usa.gov/15CwLHr). Pelosi hailed Yarmuth’s record on energy and healthcare. Yarmuth has been a member of the Committees on Budget and Education and the Workforce. Yarmuth replaces former Rep. Ed Markey, a Massachusetts Democrat who won a special Senate election this summer. Yarmuth has sponsored several telecom-relevant bills. He put forth a bill in 2007 that would create a National Center for Learning Science and Technology, on which Markey was a co-sponsor. That bill, which failed to get out of committee, was designed to keep funding for the center separate from the proceeds of spectrum auctions. He voted no on the House’s Cyber Intelligence Sharing and Protection Act, which failed to become law.
Don’t expect the Satellite Television Extension and Localism Act to be the vessel for all communications law changes, said House Communications Subcommittee Chairman Greg Walden, R-Ore., Tuesday. Former FCC Commissioner Robert McDowell had asked Walden at an American Enterprise Institute event whether telecom law would be best served by a comprehensive rewrite or in piecemeal legislation. McDowell congratulated Walden on the recent unanimous House vote approving the FCC Consolidated Reporting Act (CD Sept 11 p18). “These rewrites can take years,” McDowell noted, asking which path is better.
The massive cash injection from Vodafone’s sale of its share in Verizon Wireless could have implications for spectrum and mergers and acquisitions strategies of Vodafone’s European rivals, said analysts, a telecom association and a commercial user’s group in interviews last week. Vodafone will get $130 billion, $84 billion of which it expects to return to shareholders, it said Sept. 2 (CD Sept 4 p1). It’s also starting “Project Spring” to accelerate 4G network buildout to cover 90 percent of its five main European markets by 2017, expand 3G coverage and make other enhancements, it said. This could lead to more M&A in a market that’s already seeing heightened interest in deals, more consolidation of providers to the benefit of major telecom players and better services for business customers, said experts. They said it also could hit Vodafone rivals hard.
All three FCC commissioners told Congress the agency’s priorities range from spectrum auctions to the Internet Protocol transition to a forthcoming order to be circulated on rural call completion. They testified Wednesday before the Senate Appropriations Financial Services and General Government Subcommittee, in a hearing that ranged well beyond the FY 2014 budget slated for discussion.
T-Mobile made an economic case for limiting how much spectrum any single carrier can buy in the upcoming incentive auction of broadcast TV spectrum, in a white paper filed at the FCC and written by University of Maryland economist and auction expert Peter Cramton. “Well-crafted spectrum aggregation limits can increase competition both in the market for mobile broadband services and in the spectrum auctions in which they are applied,” the paper said (http://bit.ly/1fW70D2). “The increased competition leads to consumer benefits such as increased innovation, accelerated deployment of advanced mobile services, and expanded consumer choice. It also can lead to improved auction efficiency and higher auction revenues.” Meanwhile, a paper released by Mobile Future, the subject of a Tuesday webinar, reaches the opposite conclusion. That paper, by Robert Earle and David Sosa of the Analysis Group, looked at the effect of such restrictions on auctions around the world (http://bit.ly/14uwIIr). “Restrictive and preferential participation rules in place for the 1994 U.S. PCS spectrum auctions resulted in lost consumer welfare of as much as $70 billion,” the paper said. “Underfunded and unfunded business plans developed by new entrants acquiring set-aside licenses resulted in substantial amounts of spectrum sitting idle for many years.” The paper cites the German 3G auctions held in 2000: “Policies intended to encourage market entry were unsuccessful and resulted in a 10-year delay in the assignment of one-third of the 3G spectrum, delaying its development and the benefits consumers would have otherwise enjoyed.” The paper asks “What happens, actually, when governments have chosen to adopt such discriminatory rules?” Mobile Future Chairman Jonathan Spalter said on the webcast. “Are the auctions less successful, do they serve their ultimate goals of getting more spectrum efficiently available for consumer use?"