Kevin Martin is Right about DTV Spectrum Auction: Put Consumer Interests First
WASHINGTON, DC – Next Tuesday, the Federal Communications Commission will vote on a set of rules that will govern the auction of the 700 MHz DTV spectrum, the most important spectrum frequencies ever to be auctioned by the federal government, setting in place a process that will transform public safety communications, the way Americans watch TV, and how Americans connect to and use the Internet. As the FCC process began to wind toward its conclusion this week, the usual suspects-and some new ones-were pitching their ideas about how the rules should be written. If you’ve been spending your free time following the Michael Vick case instead of watching the 700 MHz proceeding, you may have missed Google’s efforts to propose an ever-expanding list of”open access” conditions that it says the FCC should impose on the winning bidder for part of the spectrum. It has trumpeted its desire to”commit” at least $4.6 billion of its own money in the auction if the FCC will only write the rules as Google has dictated them. Google seems to have a very different view of the wireless market than Cisco does. It apparently believes, contrary to the FCC and Federal Trade Commission, that there is insufficient competition to ensure that consumers will be treated fairly. It wants new rules that would prohibit the licensee from bundling the price of handsets and service. It wants the federal government to mandate that service providers allow access to other wireless networks. It wants the FCC to impose requirements that dictate the terms under which the winner will sell network capacity to others, as well as the terms by which the winner will interconnect with other networks.To understand just how breathtaking Google’s request is, consider this — the FCC has for many years performed extensive annual reviews of the wireless industry, and under administrations both Republican and Democrat, found the sector to be competitive. And consider this — just a few weeks ago, the Federal Trade Commission advised in an exhaustive report that there is no evidence of market failure that would warrant regulation, and no reason why existing enforcement mechanisms could not be engaged in the event a network provider engaged in future bad acts. We agree. Broadband providers have not exhibited anticompetitive behavior, because a variety of market forces are acting on them to prevent them from doing so. If a problem with market-based competition arises, then regulators can address it based on the facts. We’ll see that next week when the FCC is expected to take up issues around whether the US cellular industry’s roaming practices are fair. But basing ex ante regulation on the worries of a $158 billion behemoth in the absence of any facts to support a market failure argument is simply the wrong thing to do. Regulation is a blunt and unforgiving instrument. Fortunately, it appears that FCC Chairman Kevin Martin is using a different search engine to generate ideas. His draft proposal reportedly emphasizes two important principles designed to maximize consumer choice -consumers have the right to choose what devices they want to connect to the wireless network and the right to access web-based applications of their choice, subject to reasonable network management. If consumers want to use a device that their carrier doesn’t offer, they can do so provided the device will work on their carrier’s network in a non-harmful way. The draft also re-emphasizes a policy it made about the openness of the Internet more than two years ago -that consumers should be able to access websites and applications that they choose, and not be restricted to ones selected by the provider, again, subject to reasonable network management. The High Tech Broadband Coalition, in which Cisco participates, originally crafted those conditions in 2004 and urged the FCC to adopt them for all broadband platforms. On Tuesday, we’ll find out if Mr. Martin has convinced a majority of his colleagues of the wisdom of his proposal.