Mobile Future

Open Spectrum Auctions Will Serve Mobile Users Best

Mobile technology has come quite a long way since the first wireless phone call was made 40 years ago this month.   There are now more wireless subscriptions than people in the US.   And even though our mobile future is very bright, it remains quite fragile.  Much will depend on whether our nation – and the hundreds of millions of Americans who depend increasingly on their mobile devices – will be able to access the electromagnetic spectrum we will need to power our economy and enable the next phase of mobile innovation.

Which is why the so-called “incentive” auctions for spectrum that Congress authorized and the FCC is moving forward to implement are so important.  In a world where new spectrum can not be created, and where the amount of available spectrum is fixed, any new opportunity such as these auctions to free-up important swaths of spectrum for use by our citizens and our businesses is absolutely vital.

It is no surprise, therefore, that there has been a lot of spectrum news over the past few days, with much of the focus on whether all carriers will be eligible to participate fully and openly in spectrum auctions.

The stakes are enormous.  U.S. wireless providers are investing billions of dollars to deploy high-speed mobile broadband to support the latest and greatest mobile devices and applications that rely on the networks, and keep up with the astronomically increasing appetite of American consumers for more and more bandwidth.

But all of this mobile progress, innovation and investment can come to a grinding halt if we don’t move quickly to make more spectrum available for all mobile providers and their customers who count on them.

As we speak, the FCC is busy designing rules to govern the first-of-its kind incentive auction as well as several other more traditional auctions.  And as they do, there are some who are urging the Commission to write those rules in a way that would give a clear bidding edge to a few specific wireless providers rather than keeping the process open, simple, and fair for all.

Today’s wireless market is fiercely competitive, so it’s no surprise that all potential bidders would seek advantages wherever they can be found, including through government regulations and rules.  But on something as profoundly important as our nation’s spectrum resources, our government, guided by consumers and the nation’s best interests, must resist putting its thumb on the scales of the auction design process – of picking competitors rather than enabling competition – by choosing to limit or exclude any potential competitor from full participation in all auctions.   Doing so could have decidedly negative results, not only for the success of the auctions themselves, but also for millions of American wireless consumers, as well as the American economy which relies increasingly on sustainable access to strong, quick, and scalable broadband networks, and the spectrum that fuels them.

In this regard, we should be careful not to allow the past to be prologue.   There are examples of earlier spectrum auctions that ultimately proved unsuccessful when the FCC added special requirements and or limits on potential participants.

We can’t risk making the same mistakes again.

Last week, members of the House Energy and Commerce Committee, led by Chairman Fred Upton, expressed their concern that ”given the incentive auction’s complex challenges, the Commission must design a straight forward and intuitive process that will maximize the number of participants. … Artificially limiting either the wireless carriers that may participate or the compensation to broadcasters will surely undermine success.  Creating unbridled competition in an open and fair auction is the only way to maximize auction revenues and ensure that the spectrum is put to its highest and best use.”

Meanwhile, in an op-ed from the leader of the Expanding Opportunities for Broadcasters Coalition, representing broadcasters who are considering whether to participate in these historic auctions, warned that “restricting competitive bidding in the auctions will reduce the proceeds they generate. This undermines Congress’s express goal of incentivizing TV broadcasters to sell their spectrum, and it puts at risk funding to build the First Responders Network.”

Also this week, AT&T’s general counsel sent the FCC a letter that stressed that “… the Commission should adhere to its statutory mandate and conduct an open and competitive auction that awards spectrum to the highest bidder.  That approach offers the best prospect for a successful auction that meets all of Congress’ stated goals… It also would ensure the consumer benefits that would flow from putting this scarce resource … to its best and highest use.”

This focus on consumers and their needs, the tens of millions of mobile customers who are making their choices about what services they use, is particularly important and should to the extent possible drive the auction design process itself.

In fast-moving technology development circles, in fact, we have a popular design concept known as MVP, “minimal viable product.”  It’s the notion that, from an engineering and product development perspective, companies should only ship products that have minimally engineered attributes, and the simplest design possible, so that their customers above all can be directly engaged in the ongoing evolution and improvement of products.

The thinking is that it is consumers – not engineers, product developers, marketers, or lawyers– who are the most effective feedback loop for helping a company’s product reach its full potential.

This principle has its policy corollary:  Time and again, it has been American consumers and their decisions in the marketplace, not overwrought government regulations and mandates that intentionally or not would seek to choose winners or losers, that have guided mobile innovation to its globally competitive greatness today.

Our job is to help safeguard this consumer-driven innovation and investment that have allowed the mobile ecosystem to deliver so much progress to our nation.  Which is why, as the FCC moves forward with implementing the spectrum incentive auction, Mobile Future supports an open framework that encourages full auction participation so that spectrum will flow to the carriers (and their customers) who need it most.

Anything short of that may disrupt competition and stymie the goals established for the incentive auctions that are so critical to achieving President Obama’s commitment to deliver high-speed mobile broadband access to 98% of Americans – to fund a nationwide public safety network, to reduce the national deficit, and to lay the groundwork for a sustainable mobile future for our nation.