New report urges FCC to avoid bidding restrictions for broadcast incentive auctions

Now that Tom Wheeler has been sworn in as the new FCC chairman, momentum is likely going to pick up for the agency's incentive auctions of broadcast TV spectrum, which are scheduled to take place sometime next year. The latest salvo in how the auctions should be conducted comes from a report from the Expanding Opportunities for Broadcasters Coalition and the Consumer Electronics Association, which argues against setting restrictions on which carriers can bid for the spectrum broadcasters are expected to relinquish. At the same time, the report calls for an auction structure that will meet "the price expectations of potentially-willing TV broadcast sellers for their spectrum as repurposed for wireless broadband," while maximizing the benefits for consumers and public safety.

The broadcasters' coalition is led by Preston Padden, a former Disney and News Corp. lobbyist who is now an adjunct professor at University of Colorado Law School in Boulder, Colo. Padden retired from Disney in 2009. The coalition said it represents more than 70 TV stations.

The debate the report wades into is not new. T-Mobile US (NYSE:TMUS), Sprint (NYSE:S) and smaller carriers are one side, and AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ) on the other side over how restricted the two larger carriers should be in bidding for the spectrum in the auction. The smaller carriers have argued for caps on how much spectrum AT&T and Verizon can acquire below 1 GHz, limits that the larger carriers have said will deprive the auction of needed revenue. The author of the report, Fred Campbell, former chief of the FCC's wireless telecommunications bureau, argued that maximizing participation is the best way to achieve the auctions' aims.

The report points out that Sprint recently received billions of dollars in investments from SoftBank, and T-Mobile has been successful in acquiring spectrum. The report argues that "these facts are inconsistent with the notion that Sprint and T-Mobile would be unable to compete effectively in the wireless market without auction subsidies from the U.S. government." The study also concludes that a proposal to lower the prices paid to broadcasters for their spectrum licenses by "scoring" TV stations using criteria based on station characteristics such as population covered would give them an incentive to not participate in the auction and pursue alternative options in the marketplace. Release

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