FCC Chair Delays Wireless Spectrum Auction to 2015

Wheeler faces big challenges and thorny issues with auction

Few are likely to fault new Federal Communications Commission chairman Tom Wheeler for deciding to delay the planned auction of wireless spectrum voluntarily relinquished by TV broadcasters until the middle of 2015.

Despite the pressing need to get more wireless spectrum into the market to satisfy mobile-hungry consumers, the original 2014 deadline—set by former chairman Julius Genachowski last year—was always seen by geeks and policy wonks alike as aggressive for orchestrating most complex auction in the world.

And although Wheeler may be the "Bo Jackson of telecom," as President Obama dubbed him, Wheeler was only sworn in early last month following an eight-month period during which the FCC was operating with three commissioners, rather than its full strength of five.

"As any responsible manager knows, managing a complex undertaking such as this also requires an ongoing commitment to continuously and honestly assess its readiness and its project plan," Wheeler wrote in a blog post on Friday. " I believe we can conduct a successful auction in the middle of 2015." 

In addition to all the logistical challenges of the auction, Wheeler is also facing a very tough decision about whether to limit the two biggest wireless companies, AT&T and Verizon, from gobbling up all the spectrum. The Department of Justice, some public interest groups and wireless firms such as T-Mobile and Sprint would like to see the FCC put some limits in place. But that could run afoul of both the House GOP and the language in the law that says the FCC may not restrict bidders.

"I expect them to follow the letter and the intent of the law," said Rep. Greg Walden, chairman of the communications and technology subcommittee, during a recent meeting with press. "It's not fair to take the biggest bidders out of the process. Closing the auction to certain carriers would reduce competitive pressures and likely suppress the final bid amount, leaving crucial revenue on the table." (Walden is likely to bring up the issue with the chairman at next week's oversight hearing before his subcommittee.)

With less anticipated revenue, TV broadcasters might think twice about participating in the auction. Right now, about 70 broadcasters have agreed to give up their spectrum, falling short of the FCC's spectrum goal, according to Preston Padden, the executive director of coalition broadcasters exploring the auctioning of the spectrum.

"Whatever the perceived benefits of bidding restrictions, those benefits must be weighed against the very real danger of inadequate revenue to buy the spectrum necessary for a successful auction," Padden said in testimony he will present next Tuesday before a Senate commerce committee hearing on the status of the spectrum auctions.

Wheeler said the FCC would lay out more details about the schedule leading up to the auction at the commission's next meeting Jan. 30. 


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