Should the FCC Let Cable Companies Buy Spectrum Licenses?
SHOULD THE FCC LET CABLE COMPANIES BUY SPECTRUM LICENSES?
[SOURCE: Public Knowledge, AUTHOR: Harold Feld, Media Access Project]
[Commentary] On August 9, the FCC will auction prime spectrum cleared by of government users last year by act of Congress. This “advanced wireless services†(AWS) auction will distribute licenses in the much coveted range below 3 GHz (two paired bands, 1.710-1.755 and 2.110-2.155) and, as the name implies, the FCC will permit licensees to offer any advanced service over wireless. Mobile broadband, fixed point-to-point broadband, enhanced “4G†mobile cellular services, and just about anything else. The auction has generated a lot of interest. It’s been about 10 years since the FCC made such a good chunk of spectrum available, and it won't come up again until the FCC gets ahold of the returned television spectrum after the DTV conversion. Over 200 bidders have applied and the FCC estimates the auction could make as much as $15 Billion. Feld is concerned that in addition to the usual wireless operators like T-Mobile, the major cable operators have also applied to bid for licenses. Why concern? Isn't this good? After all, the Center for American Progress Report linked to above points out that the mobile phone industry has become increasingly consolidated and that incumbent wireless companies use auctions to keep out competitors. Isn't getting giant companies like Comcast that can go toe-to-toe with the T-Mobile’s of the world a good thing? Other than Microsoft or some other tech company, who else can outbid the incumbents on licenses? That’s the traditional FCC analysis. You look at a specific market and don't worry about any related markets. Cable companies don't offer mobile phone service. They would be a new entrant in mobile telephony. Sure, they have a lock on pay video services and are the largest residential broadband providers, but so what? This isn't a competing video service, it’s a spectrum license. The problem with this analysis is that it ignores the dark side of convergence. The Commission expects AWS licensees to potentially compete in broadband and video and voice, the same markets that, thanks to convergence, cable now occupies as either the dominant incumbent (video), the largest provider (residential broadband) or the top competitor. Even on a simple level, every license acquired by an incumbent cable operator (in its franchise areas) is one less potential competitor in video, broadband and voice.
http://www.publicknowledge.org/node/538
Should the FCC Let Cable Companies Buy Spectrum Licenses?