Comments of TechFreedom, In the Matter of Policies Regarding Mobile Spectrum Holding, FCC - International Center for Law & Economics
Focus Areas:    Broadband | FCC | licensing | Spectrum & Wireless

Comments of TechFreedom, In the Matter of Policies Regarding Mobile Spectrum Holding, FCC

Comments of TechFreedom, In the Matter of Policies Regarding Mobile Spectrum Holdings, 27 F.C.C. Rcd. 11710 (2012).

Summary

The FCC’s current policies and rules regarding mobile spectrum holdings are in desperate need of an upgrade. The landscape of the wireless market has changed dramatically over the last several years, and consumers’ demand for mobile broadband services is skyrocketing with little new supply [of spectrum?] coming online [available?] in the near future. If consumers’ demands are to be met, spectrum must be allowed to “rise to its highest valued use.” This means there must be a functional market by which spectrum can be transferred from those who currently hold it to those who value it more. In other words, to paraphrase Frank Herbert’s classic novel Dune, “the spectrum must flow!”

But for that to happen the FCC can’t sit as an impediment to consumer-welfare enhancing transactions that re-allocate spectrum to these highest valued uses. The Commission’s current spectrum transfer review process is not up to the task, and some of the proposed reforms would only exacerbate the problem. Heeding Commissioner’s McDowell’s urging that “interested parties [] comment on the potential for negative market effects should the Commission inch down the road toward spectrum caps or other new mandates,” we submit this comment to suggest that the FCC must adopt a more economically-rigorous approach to license transfer reviews — one that does not trade away effectiveness for the sake of mere administrability nor dynamic, forward-looking efficiency for the sake of the Commission’s flawed vision of an optimal, static market structure.

Rather, the FCC should follow the lead of its antitrust agency counterparts and employ a “rule of reason” analysis in its review of spectrum transfers. Moreover, the FCC should defer to the comparative advantage of its antitrust agency counterparts in the review of transactions that come before both the FCC and the DOJ or FTC, and forebear from such analysis entirely except to inform and advise the DOJ’s or FTC’s comprehensive antitrust review. Under no circumstances should the FCC re-impose spectrum caps or other new mandates that would only serve to thwart, not encourage, the progress of our wireless markets: While the current review process is flawed, a spectrum cap would be even worse.

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