FCC Chairman Julius Genachowski deserves credit for
espousing spectrum incentive auctions as a means of freeing up additional
spectrum for fast-growing wireless and other services, and I am happy to give
it to him. But he is wrong to assert, as he did at last week's Consumer Electronics
Show, that Congress should not make certain high-level policy decisions
concerning the auctions.
In Las Vegas, Mr. Genachowski said that it would be wise for
Congress not "to prejudge or micromanage
FCC auction design and band plans." And back at the FCC, Rick Kaplan,
chief of the FCC's Wireless Telecommunications Bureau, released a statement
asserting that "[s]ince the dawn of spectrum auctions, Congress has
rightly recognized the need for the FCC to have appropriate flexibility to conduct them."
It is one thing to say that Congress should not
"micromanage" FCC auction design, or "inappropriately"
restrict the FCC's flexibility. But it is another thing entirely to say that it
is improper for Congress to make certain high-level policy decisions about the
conduct of the auctions.
It is most certainly within Congress's prerogative, and,
indeed, perhaps even within its responsibility, to make such high-level policy
decisions in authorizing the incentive auctions. While Mr. Genachowski suggests
that Congress should delegate absolute discretion to the FCC with respect to conduct
of the auctions, after all, it is Congress, not the FCC, which ultimately is accountable
to the people.
Now I understand the distinction between Congress
"micromanaging" and "inappropriately" restricting the FCC's
auction flexibility is not a bright line to be found in some biblical
injunction. But surely matters such as preventing the FCC from imposing new net
neutrality restrictions or from restricting eligibility to participate in the
auction to certain bidders – the very matters Mr. Genachowski wants to reserve
to the FCC – fall into the category of high-level policy decisions that are appropriate for Congress to make.
This is not to say that Congress must decide to restrict the FCC's discretion regarding such matters,
only that it is perfectly proper for it to do so. And, given the FCC's past and
present predilections, it certainly would be reasonable for Congress, with an eye
towards maximizing consumer welfare and protecting taxpayers, to choose to make
high-level policy decisions that prevent the FCC from exercising completely
unfettered discretion.
After all, the FCC's previous forays into establishing
auction rules imposing conditions or encumbering participation have not turned
out well. It is commonly agreed, for example, that the net neutrality condition
imposed by the FCC on the 700 MHz "C" block auction decreased the
value of the spectrum auctioned by 60% based on a comparison of the winning bid
prices for the "A" and "B" 700 MHz blocks and the
"C" block. Taxpayers were the losers. And so were consumers, who lost
the opportunity to benefit from participation by those who may have wished to
put the spectrum to higher-value uses unencumbered by the net neutrality
restriction.
A final word: Note that I am not advocating that, in
authorizing spectrum auctions, Congress micromanage them. For instance, I think
it would be unwise for Congress to prescribe auction design details, say, with
respect to matters relating to bidding sequences, the size of the license
areas, number of rounds, reserve bid levels, repacking requirements, and the
like. These are not the kind of high-level policy matters I suggest it is
appropriate for Congress to address.
So, Congress and the FCC each have their appropriate roles
to play in authorizing, designing, and implementing spectrum incentive
auctions. They should play them.
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