Late last year I had the pleasure of participating in an event on Spectrum Auctions put together by the New America Foundation.  I’ve blogged about the event before, but when it was recently reported that T-Mobile’s CFO, Braxton Carter, stated that consolidation in the mobile wireless sector was inevitable (“It’s not a question of if, it is a question of when”), I was reminded of an interesting anecdote provided by one of the event’s other participants—former FCC Chairman Reed Hundt.     Specifically, Chairman Hundt was recounting his experience in designing and implementing the first PCS spectrum auctions back in the 1990s.  (Watch the first video …
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According to press reports, the Federal Communications Commission is putting the finishing touches on its much-anticipated order establishing the rules for the upcoming voluntary incentive auctions mandated by the Middle Class Tax Relief and Jobs Creation Act of 2012 (the “Spectrum Act”).  The big question, of course, is whether the FCC will impose some sort of bidder exclusion rules that would prohibit—or, at minimum, severely constrain—AT&T and Verizon from acquiring more spectrum in the auction.  While newly-installed FCC Chairman Tom Wheeler is playing his cards close to the vest, given the Sixth Circuit’s reasoning in Cincinnati Bell v. FCC, 69 F.3rd 752 (6th Cir. 1995), …
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Last month, I was generously invited to join a panel put together by the New America Foundation (“NAF”) at a Capitol Hill event entitled Spectrum Auctions: Promoting More Mobile Market Competition . . . or Less?  (For those interested, video of my panel is available here.)  It was an honor to participate, and kudos to Michael Calabrese from NAF for putting together a great event.  On the panel, I was joined by Mark Cooper (Consumer Federation of America), Fred Campbell (Competitive Enterprise Institute), and Peter Cramton (professor at the University of Maryland).  I found the discussion interesting, informative, and mostly civil.  The variance in the …
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Last week, the Phoenix Center released my Perspective entitled Will Bidder Exclusions Increase Auction Revenue?  A Review of the Arguments, which assessed the arguments being made about the revenue consequences of excluding AT&T and Verizon from the upcoming broadcast spectrum incentive auction.  While a number of parties have claimed that such exclusions can enhance auction revenues, I show in my Perspective that the economic theories they rely upon do not support the claim.  In fairness, Sprint, T-Mobile, and others are quick to note that they are not proposing to exclude the two most successful carriers completely, but rather are proposing they be subject to a …
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Six years ago, the Phoenix Center released (and later published) a paper entitled Network Neutrality and Foreclosing Market Exchange: A Transaction Cost Analysis.  In that paper, we analyzed the effects of network neutrality proposals that foreclose or severely limit market transactions between content providers and broadband service providers.  Our model revealed that under plausible conditions, rules that prohibit efficient commercial transactions between content and broadband service providers could, in fact, be bad for all participants: consumers would pay higher prices, the profits of the broadband service provider would decline, and the sales of Internet content providers would also decline.  As a result, such proposals would …
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Spectrum Caps 01

Last year, when Congress was debating the voluntary incentive auction provisions of the Middle Class Tax Relief and Jobs Creation Act, many argued—including FCC outgoing Chairman Julius Genachowski—that the Commission should have the authority to adopt auction participation rules so that it could prevent an “excessive concentration of licenses” under Section 309(j)(3)(B) of the Communications Act.  While Congress did not include any specific auction participation rules in the Middle Class Tax Relief and Jobs Creation Act, Section 6404 of the new legislation states that “Nothing … affects any authority the Commission has to adopt and enforce rules of general applicability, including rules concerning spectrum aggregation …
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In a recent speech, outgoing FCC Chairman Julius Genachowski once again reiterated the critical importance of spectrum policy “breakthroughs” to address the “tremendous stress” on the capacity of the nation’s wireless networks “from growing digital demand.”  While Congress and regulators are doing what they can, including addressing tower siting (here and here), reallocating and sharing government spectrum (here and here), and moving forward with the voluntary incentive auctions for broadcast spectrum, these actions represent only partial (and possibly untimely) solutions to spectrum exhaust.  Addressing the problem in the near term will require secondary market transactions for spectrum, where spectrum is reassigned from lower to higher …
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Each year, Section 331(c)(1)(C) of the Communications Act directs the Federal Communications Commission (FCC) to “review competitive market conditions with respect to commercial mobile services and shall include in its annual report an analysis of those conditions.”  To this end, the agency released its Sixteenth Annual CMRS Report last week.  In this latest report, the FCC makes few formal findings, but instead “focuses on presenting the best data available on competition throughout this sector of the economy and highlighting several key trends in the mobile wireless industry.”  (Sixteenth Report at ¶ 2.)  Consistent with the other CMRS Reports issued under Chairman Julius Genachowski’s watch, the …
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