It appears that the FCC wants to “pick winners and losers rather than letting the markets work,” AT&T CEO Randall Stephenson said about the agency’s scrutiny of spectrum transactions. Specifically, he criticized the agency for applying the spectrum screening standards differently when reviewing AT&T’s T-Mobile USA deal than when evaluating the Qualcomm spectrum transfer that was approved earlier, he said during AT&T’s earnings call Thursday. Meanwhile, the carrier lost $6.7 billion in Q4 partly due to the deal breakup fee paid to T-Mobile, other charges and benefit plan costs.
President Barack Obama complained in his State of the Union address Tuesday night of an “incomplete high-speed broadband network.” The unfinished network “prevents the small-business owner from selling her products all over the world,” he said. Obama also urged Congress to pass cybersecurity legislation. Obama sought tax changes benefiting the tech industry. “If you're a high-tech manufacturer, we should double the tax reduction you get for making your products here.” And Obama announced a trade enforcement unit to investigate counterfeiting and piracy by China and other countries. After the speech, House Commerce Committee Chairman Fred Upton, R-Mich., blamed the FCC for the incomplete broadband network. The FCC “is protecting its turf instead of joining us to free up airwaves to build the next generation communications networks,” Upton said. Senate Commerce Committee Chairman Jay Rockefeller, D-W.Va., praised Obama’s comments on cybersecurity and broadband. “I have been working for years to address our country’s vulnerability to cyber-attacks and believe now is the time for Congress to act,” Rockefeller said. Senate Homeland Security Committee Chairman Joe Lieberman, I-Conn., said senators are “committed to bringing bipartisan cybersecurity legislation to the floor in the next few weeks.” In industry statements, broadband providers unsurprisingly praised the president’s call for more broadband. “As this administration moves forward on this initiative,” said National Telecommunications Cooperative Association President Shirley Bloomfield, “I urge them to ensure that actions by our federal agencies support, rather than undermine, the independent telecom companies that are key to connecting and employing rural Americans.” The Information Technology Industry Council hopes “Republicans and Democrats put aside partisan differences in this election season and realize that specific ideas -- tax reform, spectrum auctions for mobile broadband, high-skilled labor regulatory reform, improved trade, and smart cybersecurity, just to name a few, are essential ingredients to short-term job creation and a long-term recovery,” ITI President Dean Garfield said. TechAmerica acting President Dan Varroney urged Obama to “follow through” on his tech goals.
The House Communications Subcommittee plans to be active this year on FCC process reform, cybersecurity, the LightSquared controversy and the future of video, audio and data, Chairman Greg Walden, R-Ore., told reporters Wednesday morning. Walden said he was optimistic about passing spectrum legislation as part of the payroll tax cut bill. And he criticized FCC Chairman Julius Genachowski’s remarks at the CES show seeking more flexibility from Congress on auction conditions.
The FCC should remember it works for Congress as legislators work on a spectrum bill, said Rep. Gene Green, D-Texas. At CES, FCC Chairman Julius Genachowski sought flexibility to make rules for spectrum auctions (CD Jan 17 p4). “It is the role and obligation of Congress to specify the authority of regulatory agencies such as the FCC,” Green said in a written statement last week. “It is important that the Commission is reminded that they are not permitted to operate outside the constraints of Congressional authority."
T-Mobile Vice President Kathleen Ham questioned why Congress needs to put tight controls on the FCC’s ability to shape future spectrum auctions, in a blog post Monday. Ham, the first chief of the FCC’s Auctions Division, said the commission has extensive experience managing auctions and should be left to do a job it knows well. Ham’s comments are in sharp contract to those by AT&T, T-Mobile’s recent proposed merger partner (CD Jan 18 p1). “I am puzzled by the newfound distrust in the FCC to establish the ground rules for future spectrum auctions,” Ham wrote (http://xrl.us/bmpkoh). “Legislation pending in Congress would effectively preclude the FCC from considering existing spectrum holdings in determining the qualifications for participation in auctions.” Congress’s fear appears to be “that the FCC will unwisely promulgate regulations to restrict the largest wireless carriers from bidding for licenses in upcoming auctions,” she contended. “Some suggest the FCC is grabbing for new and extraordinary power to impose such limits as part of its effort to gain incentive auction authority and additional spectrum for the mobile broadband future. In truth, for almost 20 years, the FCC has had such authority under section 309(j) of the Communications Act, and has used it to establish reasonable measures to fulfill Congress’s directive to avoid excessive concentration of licenses and promote competition in spectrum auctions."
The FCC misunderstood AT&T’s objections to remarks last week by Chairman Julius Genachowski over how much authority the agency should have to set the rules for incentive spectrum auctions, Senior Vice President Robert Quinn said in a blog. Quinn said AT&T’s primary concern is that the company not be excluded from bidding in upcoming auctions because of its large size relative to other carriers.
LAS VEGAS -- AT&T Senior Executive Vice President Jim Cicconi said he hopes FCC Chairman Julius Genachowski’s remarks on spectrum legislation aren’t a sign the agency would oppose bills that limit the commission’s ability to place conditions on spectrum licenses sold during a voluntary incentive auction of TV spectrum (CD Jan 13 p1). House Commerce Committee Chairman Fred Upton, R-Mich., also raised concerns about Genachowski’s statements made in a CES keynote speech on Wednesday. Wireless Bureau Chief Rick Kaplan defended Genachowski, and T-Mobile backed the chairman, too.
LAS VEGAS -- FCC Commissioner Robert McDowell said in remarks Wednesday at CES it’s unclear whether Congress will approve incentive auction legislation. All three FCC commissioners spoke at the conference, including a keynote address by Chairman Julius Genachowski, prior to a panel featuring McDowell and Mignon Clyburn. A key topic was a proposed incentive auction of broadcast TV spectrum, possible only if Congress gives the agency authority.
FCC Commissioner Robert McDowell expects Universal Service Fund reform to dominate the FCC’s agenda in the early part of 2012, starting with a Lifeline cleanup order at the Jan. 31 meeting. McDowell hopes that will be followed by an order addressing USF contribution issues left unsettled by last October’s order (CD Oct 28 p1), he said during an interview last week. McDowell said he remains open minded on a 700 MHz interoperability order and stressed the importance of spectrum efficiency. McDowell also thinks more media ownership deregulation than the FCC proposed in the quadrennial review may be needed.
The FCC should streamline and clarify its Section 310(b)(4) review process with an eye on spurring foreign investment, CTIA said in comments (http://xrl.us/bmnuxq) responding to an August notice of proposed rulemaking on a review of foreign ownership practices for common carrier and aeronautical radio licensees. “Additional investment is essential for U.S. wireless providers engaged in capital-intensive efforts to expand 4G network deployment, participate in upcoming spectrum auctions, and maintain U.S. leadership in mobile broadband, and access to capital from foreign investment can play a critical role for many carriers in meeting these objectives,” CTIA said. “Thus, CTIA supports the Commission’s proposals to streamline and provide greater transparency and predictability."