dailywireless.org » FCC Testifies at House Committee

FCC Testifies at House Committee

And when I really get to know you
We’ll open up the doors and climb into the dawn
Confess your passion, your secret fear
Prepare to meet the challenge of the new frontier
– The New Frontier (music video)

The House Telecommunications & Internet Subcommittee is holding an FCC oversight hearing today (July 24), with all the commissioners scheduled to be in attendance.

With the FCC auctioning 700 MHz analog TV spectrum early next year — Dingell wants to know how a possible public-private interoperable public safety communications network will work. Specifically, he asked Martin to outline how the government will guarantee the network is built and operational if the private side of that partnership falls on financial hard times or the two sides cannot agree on how the network is to operate, or if local emergency responders are allowed to opt out of the network.

He also wants to know more about the chairman’s plan to apply some type of open access conditions on a portion of the spectrum being auctioned. Google says they want to restore competitive balance to the auction process — a proposition denied by most carriers.

Chairman Dingell, a Democrat, additionally wants to know how the FCC decided to grant some waivers, and not grant others, to its July 1 deadline for separating the security and channel-surfing functions of cable’s digital set-top boxes. The FCC had already delayed implementing the ban, which was meant to spur a retail market in set-tops.

UPDATE:

A majority of the FCC members told a House subcommittee Tuesday that they support an “open access” requirement on one swath of airwaves, reports the Washington Post. “Consumers would be able to use the wireless device of their choice and download whatever software they want,” Martin told the panel.

A broader open access provision, however, supported by Google and public interest groups, received limited support from the commission’s two Democrats and opposition from Martin. Republican Commissioners Tate and McDowell said they haven’t decided whether to support open-access requirements, although McDowell said he was leaning toward opposing it.

“I want to commend Chairman Martin for proposing in his plan… a beachhead for consumer choice and innovation in the wireless marketplace,” said Rep. Ed Markey (D-Mass.), chairman of the panel and a frequent FCC critic. “In context, Chairman Martin’s plan is quite modest.”

Critics of Martin’s auction plan said the conditions proposed by Martin would reduce the value of the airwaves and bring in less money for the federal government. Both Reps. Fred Upton (R-Mich.) and Joe Barton (R-Tex.) said the spectrum should go the highest bidder, with no conditions attached.

Rep. Jane Harman, D-Cal., focused her questioning on the proposal to compel an auction winner to work with public safety to build out a wireless broadband network. Martin responded that in the absence of a decision by Congress to fund the construction of such a network using public monies, his plan was the best option on the table.

FCC Chairman Martin said the agency will produce 700MHz rules by July 31st.

The FCC auctioned the first two PCS licenses in March 1995 (the A and B block), each contains 30 MHz of spectrum in the 1900 MHz band. As NewAmerica.net notes:

“The FCC imposed eligibility restrictions through the policy of spectrum caps. Wireless incumbents were prevented from purchasing 30 MHz licenses in geographic areas in which their combined holdings would exceed the spectrum cap of 45 MHz. However, some of these incumbents were able to purchase 10 MHz licenses in the D and E blocks in a subsequent auction without exceeding the cap. Despite the protests of the incumbents at the time, the A and B block auction turned out to be a noted success.

Incumbent cellular operators, of course, own the 120MHz of PCS spectrum (at 1.8/1.9 GHz) and will dominate the 90 MHz of AWS spectrum (at 1.7/2.1 GHz), which the Bush administration made available for cellular operators (like San Antonio-based AT&T). The capacity-constrained Upper 700MHz band only has 30 MHz available nation-wide, with Martin’s proposal calling only for 22 MHz of that to be subject to “open-access” requirements. The bulk of the lower 700 MHz spectrum (30 MHz) may go to applications like Mobile TV.

With only 30 MHz, there’s simply not enough capacity for real, head-to-head competition, as on PCS and AWS bands with 3-4 times the capacity.

Another problem the FCC faces is the Universal Service Fund, which has collected $44 billion over its 10-year lifetime from a surcharge on the phone bills of nearly every American, reports the Washington Post.

Regulators and lawmakers have long viewed the fund as inherently flawed. Even a member of the federal-state board that runs the program calls it “bizarre.” But efforts to change it have been derailed repeatedly by companies that benefit from the largesse and by supporters in Congress who represent sparsely populated states.
Now there are new calls for change, driven by the dramatic increase in money flowing to the cellular companies competing for rural business. Payments have gone from $131 million in 2003 to an expected $1.1 billion this year, according to an Associated Press analysis.
Increased demands by these carriers recently pushed the fee paid by telephone customers to the highest level in program history. The Federal Communications Commission will decide soon whether to cap payments while it considers options for long-term changes — again.

Critics say the cellular companies are enjoying windfall profits on the backs of ratepayers.

Each time a cell phone company signs up a new customer, it collects a subsidy. If the customer keeps his land line, the fund pays a subsidy to both carriers. If the customer opts to drop his land line and keep his cellular phone, the per-subscriber subsidy for the land line carrier actually goes up, keeping the overall subsidy unchanged.

Chairman Martin recently gave an interview to The Hill about the 700 MHz auction.

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