Mobile Future

Commissioner Ajit Pai’s Five Keys to FCC Success on Incentive Auction

Yesterday, FCC Commissioner Ajit Pai joined Mobile Future for a discussion featuring several key voices on technology, opportunity and investment in the sector. Just hours before FCC Commissioner-Designate Mike O’Reilly faced his Senate Confirmation hearing, Pai shared his thoughts on both the vibrant present and significant potential in the wireless sector. Sharing a story of his two year old unlocking and adeptly operating an iPad, Pai views the mobile marketplace as a regulator as well as a father looking to an incredible future for his children growing up with omnipresent, mobile connections.

We had the opportunity to ask Commissioner Pai about the wireless landscape as the FCC returns to a full dais hopefully before first frost. Speaking to the upcoming spectrum incentive auction, Pai laid out five keys to FCC success:

  1. Stick to the terms of the statute so we can maximize the resulting revenue to pay for America’s first nationwide interoperable public safety network and reduce the national deficit.
  2. Let the market, rather than government fiat, drive how the auction is structured. Essential to achieving this goal is letting all commercial wireless companies participate in the forward auction held after broadcasters sell their spectrum.
  3. Be fair to all stakeholders: both broadcasters and commercial wireless users. This auction can succeed because, if conducted optimally, broadcasters will get full value for their spectrum holdings and wireless providers will have maximum spectrum available to deploy to meet consumer demand and deploy next-generation networks.
  4. Try to accomplish the 600 MHz auction in a reasonable timeframe. The FCC must prove wrong its reputation for “speaking, not doing.” There’s too much at stake in this auction and there’s a limited time window to get it right to continue U.S. leadership in wireless connectivity.
  5. Understand the opportunities and limitations of physics. Any spectrum band plan that’s created will be bound by technical limits. Spectrum is a limited resource and there’s no shortcut to working out a plan which allocates spectrum to its highest, and best use.

Following Commissioner Pai was an insightful panel of leading analysts in the financial sector discussing the historically vibrant mergers and acquisitions activity in the mobile market. Panel consensus pointed to temporarily low interest rates driving secondary market transactions. Also, it’s clear that scale is critical to successful network deployment, and deployment is not possible without spectrum availability. America’s wireless providers are looking around to find a seat before the music stops. Spectrum is limited, and even more so if Washington delays. Skyrocketing consumers demand for mobile is driving capital investment and that investment is not put to best use unless spectrum is available for commercial wireless use.

Today’s mobile consumers own enough iPhones to outweigh 10,000 six-ton elephants. And that’s before we count the Samsung elephants and the Motorola elephants, and all the others who make up the other 95% of phones worldwide.  The wireless marketplace is a weighty issue and should be a top priority for leaders in Washington.

Commissioner Pai said it best during our discussion: the FCC needs “an aggressive, forward thinking policy.”  He continued that when it comes to spectrum “we need to put some points on the board.”

I couldn’t agree more.