Tuesday, January 08, 2013

Will FCC Adopt Rules Removing Threat of Ad Hoc Spectrum Restrictions?

On January 7, the FCC completed its collection public comments in mobile spectrum holdings rulemaking proceeding. The Commission sought comments on its general approach to mobile spectrum holdings, including some bright-line rules regarding its analysis for transfers of spectrum licenses.
I made a conditional case for bright-line rules in my Perspectives from FSF Scholars paper "Spectrum Rules for Reducing Uncertainty Must Reject Unduly Regulatory FCC Precedents." In that paper, I wrote:
Adoption of formal rules for how the agency analyzes the competitive effects of spectrum license acquisitions could reduce regulatory uncertainty. But new rules will be undesirable if they end up guaranteeing that wireless carriers are saddled with insurmountable regulatory roadblocks. New spectrum rules will only be desirable if they further innovation and investment in the wireless market. And those rules will do so only to the extent they encourage and enable wireless carriers to pursue new spectrum for upgrading and deploying next-generation wireless networks.
A case-by-case approach – rooted in a market power analysis that looks at whether there is actual harm to consumer welfare – would render any new set of bright-line rules unnecessary.  But on several prior occasions the FCC has imposed ad hoc restrictions on spectrum holdings through auction rules or merger reviews.  This has prompted calls for clearer rules to reduce moving goal post-rationales for new restriction.
Of course, no new rules would be far better than a new set of restrictions on mobile spectrum holdings, such as restrictions on wireless provider eligibility in future spectrum license auctions or re-imposition of spectrum caps.  What course the Commission will pursue in this proceeding will be seen in the time ahead.