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FCC to Review Spectrum Screen - Broadcasting & Cable

FCC to Review Spectrum Screen

Republicans concerned it could adversely affect spectrum revenues
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The FCC voted Friday to review its spectrum screen, which
potentially limits -- it triggers additional scrutiny -- the amount of mobile wireless spectrum
any one company can own in a market.

While FCC chairman Julius Genachowski said it was a needed review,
there was major pushback from Republican commissioners, concerned that any
tightening of that screen or capping of holdings or move away from the current
case-by-case determination could negatively affect participation in the
broadcast spectrum incentive auction.

"There is no question that it is time for the
Commission to update its policies on measuring how spectrum aggregation impacts
competition in the wireless industry," said Commissioner Mignon Clyburn in
casting her vote.

The FCC is seeking comment--the notice includes no tentative conclusions--on the following:

•"Continuing the current approach to evaluating mobile spectrum holdings in the context of transactions and auctions-a case-by-case analysis, or moving to a different approach such as bright-line limits;
• "Including additional spectrum bands in evaluating spectrum holdings;
• "Updating the Commission's geographic market analysis, including to consider the impacts of mobile spectrum holdings at the national as well as local levels;
• "Whether the Commission should make distinctions among bands in assessing spectrum holdings; and
• Updating the Commission's attribution rules."

The review of the spectrum holdings threshold was seen by some as a way to get around the fact that no limits on the size of spectrum
bidders was included in the spectrum auction legislation.

Commissioner Ajit Pai, who concurred in the decision, said he, for
one, was skeptical about any steps that would discourage participation and the
potential take from those spectrum auctions, including any narrowing of the
screen.

Geoffrey Manne, executive director of the International
Center for Law & Economics, is concerned that if the FCC tries to screen
out larger wireless players from the spectrum auction via adjusting the screen,
it would be tantamount to "micromanag[ing] scarcity as an activist
intervenor in the market - screening-out some market participants as ‘too big,'
and scrutinizing every scarcity-induced merger, deal, spectrum transfer, usage
cap, pricing decision and content restriction for how much it deviates from a
fanciful ideal," he
blogged.

Public Knowledge senior staff attorney John Bergmayer says
the FCC spectrum holdings NPRM quite differently. "The current screen is
outdated -- its biggest flaw being that it treats all spectrum alike, even
though some spectrum bands are better-suited to mobile broadband than
others.  And the current screen has been ineffective as a tool to prevent
concentration, as the last few years have seen Verizon and AT&T build up an
ever-growing ‘spectrum gap' between them and their nearest competitors.

"It would do little to promote wireless competition if
AT&T or Verizon simply acquired the new spectrum that becomes available
under the incentive auction process, so it makes sense for the Commission to
revisit its screen now."

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