A new paper by Allan Ingraham and Hal Singer, in conjunction with Mobile Future, explores claims made by the Competitive Carriers Association (CCA) and its members, including DISH, Sprint and T-Mobile, and the recent paper they commissioned in an attempt to justify additional set-asides in the upcoming spectrum incentive auctions.
While Mobile Future questions the need for any reserved spectrum the FCC has already set aside up to 30 MHz of prime, unencumbered spectrum for participants without significant low-band spectrum. CCA presents no evidence that would justify further tilting auction rules in favor of its members. Using two measures of impairment widely accepted by economists—(1) the inability to win subscribers and (2) the inability to impose price discipline—the Ingraham/Singer analysis flatly debunks any notion of impairment.
While we still believe a reserve is unnecessary, it has been thoroughly debated and the FCC came to its conclusion just last year. Nothing in the CCA paper appears to credibly support any set-aside, let alone supports increasing it. Given the complexity of the auctions, the FCC should focus on other actions that will benefit all auction participants, such as increasing the amount of clear spectrum available. Making changes to the set-aside at this juncture would be absolutely unjustified and would unnecessarily undermine the auction’s success.