Some GOP lawmakers protest spectrum auction plan

The FCC plan includes Net neutrality-like rules

Several lawmakers are raising questions about a spectrum auction proposal from the chairman of the U.S. Federal Communications Commission (FCC), saying it could limit the number of bidders and raise costs to consumers.

FCC Chairman Kevin Martin's plan would require winners of part of the 700 MHz band of spectrum, to be auctioned by early next year, to accept any wireless devices, including phone handsets. That would allow customers to transfer devices between mobile providers. Martin's plan would also include Net neutrality-like rules, prohibiting auction winners from blocking or slowing Web content from other providers.

But several members of the House of Representatives Subcommittee on Telecommunications and the Internet, many of them Republicans, questioned Martin's proposed rules, which have the support of a majority of the FCC.

Rep. Joe Barton (R-Texas) said he is "very disappointed" that fellow Republican Martin is proposing regulations for part of the 60 MHz of spectrum to be auctioned. Some proposals by consumer groups and Frontline Wireless LLC would also require auction winners to provide wholesale access to competitors; Barton praised Martin for not including that provision.

"It's not quite as bad as the Frontline plan, but I don't think it's as good as absolute no-condition auction," Barton said.

Many Republicans suggested that auction conditions would decrease the value of the spectrum. Congress expects the auction to raise $10 billion, with about half of that going toward reducing the U.S. government budget deficit. "Congress has already spent that money," said Rep. Charles Gonzalez (D-Texas).

Questions about Martin's proposal also came from a handful of Democrats. Rep. John Dingell (D-Mich.), chairman of the full House Energy and Commerce Committee, asked FCC commissioners whether the device-portability rules would increase the cost of wireless phone plans.

Customers want to be able to take their mobile phones with them when they switch carriers, but carriers generally haven't offered that option, Martin said. "I think the benefits outweigh the costs and concerns," he said.

Barton suggested that winning bidders could implement the device-portability and Net neutrality proposals without FCC mandate. Google Inc. has indicated it could bid billions of dollars, Barton noted. "Why shouldn't we just let Google bid?" he said. "If they've got a better idea, why don't they go into the marketplace and bid their four or five billion dollars?"

Despite customer demand for device portability, carriers haven't acted on it, Martin said. Wireless carriers didn't offer phone number portability until the FCC forced them to do so in late 2003, then millions of U.S. residents took advantage of it, he said.

Asked whether they support Martin's proposals, the FCC's two Democrats said they do; the two other Republicans said they hadn't yet decided. "Please let me keep my phone and let me take it wherever I want," said subcommittee Chairman Ed Markey (D-Mass.).

The so-called open-access rules are necessary for new broadband competition to challenge cable and telecommunications providers, said FCC commissioner Michael Copps, a Democrat.

The 700-MHz auction is the last major spectrum auction on the horizon, many participants said. "This is one proceeding where we cannot fail," Copps said.

Some lawmakers suggested Martin's proposal doesn't go far enough. Rep. Charles "Chip" Pickering (R-Miss.) called on the FCC to require wholesale access rules as well. Wholesale access would allow new and innovative services to flourish on the networks using the spectrum, he said.

Martin's plan would "enhance markets and competition," he said. 

Copyright © 2007 IDG Communications, Inc.

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