MAP Responds to 700 MHZ Auction Results
Posted: Thursday March 20, 2008
STATEMENT OF MEDIA ACCESS PROJECT IN RESPONSE TO 700 MHZ AUCTION RESULTS.
The following statement may be attributed to Harold Feld, Senior Vice President, Media Access Project:
This auction proves two things. First, anonymous bidding works. Second, that auctions alone will not bring competition to the wireless world or break the current cable/DSL broadband duopoly.
On the positive side, Echostar — which had been blocked by the cable consortium Spectrum Co. in the last major FCC auction, won a substantial number of E Block licenses, which will increase its competitive position against cable. The 700 MHz Auction also proved a financial success, bringing in more money than any other FCC auction. Both of these positive results come from the FCC’s decision to adopt anonymous bidding — which prevented blocking by rivals or collusion to reduce prices.
On the other hand, this auction also proves that major incumbents will always be able to win if they spend enough. The advantages an incumbent enjoys — already having a network, customers, and name recognition for example — give it enough of an edge to win every time. For Americans to see real competition in the wireless world, Congress and the FCC must rethink the reliance on auctions and return to spectrum caps or other means to limit the power of the existing wireless oligopoly.
Finally, although the open device condition on C Block will help to move Verizon and the rest of the industry in the direction of open networks, the auction failed to establish a genuine broadband “third pipe.” In many ways, however, this failure is good news. With the distraction of a wireless broadband third pipe behind us, policymakers can turn their attention to real solutions for the problem of the cable/DSL duopoly that subjects Americans to high prices, slow speeds, and poor service.
In what was undoubtedly the most equal and fairest FCC auction ever held, the incumbents still won the lion’s share of licenses. But at least, thanks to anonymous bidding, they paid market value.
Contact:
Harold Feld
Senior Vice President
hfeld@mediaaccess.org
(202) 454-5684
The full press release can be found here.