Political Favors at the FCC

[Commentary] Most people don't think Silicon Valley billionaires need government subsidies, but Kevin Martin isn't among them. Before he exits his post next month, the Federal Communication Commission Chairman is trying to put in place rules for a wireless spectrum auction that all but guarantee the licenses go to a company backed by venture capitalist John Doerr. Chairman Martin wants to place restrictions on how the spectrum can be used, which will discourage larger, established wireless carriers from participating in the auction and bidding up the price. Yesterday even the Bush Administration whacked Martin, its own appointee, over the auction. Commerce Secretary Carlos Gutierrez worried in a letter that Martin is setting rules "favoring a particular business model," and took special exception to a requirement that the winning bidder provide free broadband services at government-regulated speeds. "This mandate would likely lead to congested and inefficiently used broadband, and it would be inconsistent with the Administration's view that spectrum should be allocated by markets rather than governments," Sec Gutierrez said. Prices for broadband are falling rapidly, geographic coverage is growing and new investment continues. Which is to say that the telecom market is highly competitive, and clean auctions for spectrum can keep it that way. The FCC's job isn't to favor the politically connected. The goal should be to ensure that airwaves go to companies with the resources and incentives to best use them. Martin's political favoritism continues the pattern of his unfortunate chairmanship and will cost taxpayers in the end.