FCC changes spectrum allocation rules — after much of it is captured

[Commentary] Historically, the Federal Communications Commission has applied a three-part screen to identify those geographic areas that receive more detailed examination for spectrum allocation and divestiture in merger proceedings. The FCC's standard competitive analysis practice is first to define the relevant product and geographic markets, then to apply an initial screen to the spectrum holdings of the applicants, and then to conduct a market-by-market analysis of the markets captured by the initial screen. On Nov 4, the FCC noted its intention going forward to expand the commission's use of the three-part screen. In the decision, the FCC for the first time stated that it "intend[s] to apply prospectively [its] standard competitive analysis to spectrum acquired via auction as well as via transactions." In other words, from now on, the FCC will apply its 95 MHz spectrum screen to both forms of spectrum acquisition — via auction and acquisition. One must wonder why, after all the "prime beach front property" spectrum has been captured, the commission is now finally willing to establish this broader analysis. One must also wonder what the actual benefit will be to the tier-two and tier-three wireless carriers who have attempted to acquire spectrum at auction, only to be outbid by the unfettered resources of certain tier-one competitors. It may take some time to answer these questions. However, what is clear is that the FCC should have taken such action a long time ago.

(Eric Peterson is Executive Director of the Rural Cellular Association.)