Verveer: First Two Auctions Should Cover Most of Statutory Financial Obligations

That would relieve pressure on broadcast incentive auction in terms of revenue-raising
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Phil Verveer, senior counselor to FCC chairman Tom Wheeler, said Tuesday that he expects the FCC's first two spectrum auctions—H block and AWS—will raise most if not all of the money to fund FirstNet and other financial obligations under the statute.

At the Free State Foundation telecom conference in Washington, Verveer, appearing on a panel, said: "We've had one auction, we're going to have another that is going to help meet the statutory requirements with respect to contributions. We're going to be very close or perhaps even have met them by the time the incentive auction takes place."

Chief among those obligations is the $7 billion that will be needed to fund FirstNet, the interoperable broadband communications network.

Verveer told B&C/Multi after the panel that he thought the FCC would get close to covering those obligations with the first two auctions. The H block raised $1.564 billion, so the AWS auction, which is scheduled for the fall, will have to raise north of $5 billion. The incentive auction is slated for mid-2015, with rules of the road expected to be teed up in the spring, perhaps as early as the May public meeting.

Verveer also told B&C/Multi that even more a priority in the auction than the dollars and cents was the ability get the spectrum out quickly to the marketplace.

All the panelists, which also included academics and Hill staffers, were asked what they thought the FCC's biggest priority was and most said the incentive auctions.

University of Pennsylvania law professor Christopher Yoo put it most colorfully: "The enormous sucking sound you hear at the [FCC] is the incentive auction pulling every single member of the staff into its ambit, essentially consuming almost every bureau and every part of the organization." He said he hoped the "political exigency" of the auctions did not stop the commission in its other goals.

David Redl, majority chief counsel for the House Communications Subcommittee, said the incentive auctions were "priority one, two and three" for the commission, and should be, though he conceded he might be biased since he worked on the legislation that established that auction. He said he hoped the commission could take care of the broadcasting issues—Communications Subcommittee chair Greg Walden (R-Ore.) is himself a former broadcaster. "The wireless industry is used to dealing with the auction process at the FCC," he pointed out. "The broadcast industry is not. So, the sooner the FCC can answer the questions and solve the question marks in the equation for broadcasters, the sooner we'll be back on track to getting this thing done in a timely manner."

Nicol Turner-Lee, VP and chief of the MMTC Research & Policy Initiative, also said the auctions were important, particularly as a vehicle for greater minority spectrum ownership. She put in a plug for upping bidding credits and taking other steps to insure designated entities like women and minorities have a seat at the table.

"We can't go another auction without minority ownership and increasing the opportunities for minorities to be engaged," she said.

Shawn Chang, minority counsel for the House Communications Subcommittee, who also worked on the incentive auction legislation, agreed with Redl that the auction was priority one, two and three, but also said that network neutrality should be a priority. "We're eagerly anticipating the FCC's interpretation and the use of its 706 authority as it applies to broadband providers," he said.

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