Pai Has Issues With Spectrum Auctions

Concerned framework could limit bidding and end auction too early

By John Eggerton -- Broadcasting & Cable, 12/11/2012 3:17:49 PM

FCC commissioner Ajit Pai has a number of problems with the FCC's incentive auction framework, which he plans to share with a House Communications Subcommittee hearing panel Wednesday, where he and the other commissioners are slated to testify on the status of that framework, which the FCC released in September and targets a final vote for mid-2013.

According to his prepared testimony, Pai will tell them that he is concerned about the proposal that the only condition for closing the auction is that it cover the costs of reverse auction -- paying and moving broadcasters. That, he says, is like ending an auction after the reserve price is met. If the FCC only covered the cost, it would not have any money for a first responder net, public safety research or deficit reduction.

"The Spectrum Act mentions each of these items, which makes it difficult to square that legislation with an auction that would provide no funding for them," he says.

Pai is also concerned about possible limits on who could bid, which could also affect the proceeds and success of the auction, he says. "If the Commission starts picking and choosing who may participate in the forward auction -- such as by setting a spectrum cap or narrowing the spectrum screen despite the robust competition in the wireless market -- it will result in less participation, less revenue, less spectrum available for mobile broadband, and less funding for public safety," he says. "Given the importance of constructing an interoperable public safety network, as well as the need to reduce the deficit and fund next-generation 911, I believe the FCC must seek to maximize the net revenues obtained through the commercial broadcast incentive auction."

Pai is not opposed to looking at ways to improve the FCC's spectrum cap/screen policy, but he does not support using changes to that to limit bidding in the spectrum auction.