The Justice Department urged the FCC to free up underutilized spectrum for wireless broadband use, though the DoJ warned against auctioning off airwaves in ways that would favor major telecom incumbents AT&T and Verizon.
The comments, made in a 30-page filing regarding the development of the FCC's national broadband plan, due next month, made clear that smaller wireless companies such as Sprint Nextel, T-Mobile USA and "startups" need more spectrum to compete fairly.
"Although there may be other constraints on the ability of providers such as Clearwire, T-Mobile, Sprint and new startups to develop and deploy effective wireless systems that could provide broadband services comparable to those of existing providers, the scarcity of spectrum is a fundamental obstacle that the commission should address," the department said in its comments, which were signed by the Justice Department's antitrust chief, Christine Varney. "Stated simply, without access to sufficient spectrum a firm cannot provide state-of-the-art wireless broadband services. Reallocating spectrum that is being underutilized would encourage the deployment of wireless services and could help to make such services more competitive with wireline offerings."
In identifying new spectrum, the FCC should make sure it generates value for consumers, the Justice Department said. When market power is not an issue, usually the best way to assign spectrum licenses is through an auction.
"But that approach can go wrong in the presence of strong wireline or wireless incumbents, since the private value for incumbents in a given locale includes not only the revenue from use of the spectrum but also any benefits gained by preventing rivals from eroding the incumbents' existing businesses," the department said, adding that "there are substantial advantages to deploying newly available spectrum in order to enable additional providers to mount stronger challenges to broadband incumbents."
AT&T and Verizon scored the lion's share of the 700 MHz spectrum licenses the FCC put up for auction in 2008, and plan to use the airwaves to roll out LTE technology. The auction raised close to $20 billion in winning bids.
Wireless carriers have long called for more spectrum to be allocated for wireless broadband. In recent months, FCC officials have discussed the possibility of transferring spectrum from TV broadcasters for wireless broadband use.
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