The New America Foundation today held a two panel discussion on the public interest standard as it applies to broadband and spectrum. Larry Irving defined the public interest as including universal service, diversity, and localism. From what I gathered, the premise was transitioning these broadcast public interest components to broadband.

In other words, society has as a social policy goal ensuring universal access to broadband services; making sure a diverse array of voices can receive and send messages via broadband; and ensuring content sent and received via broadband includes homegrown content about things going on next door, including news about Mrs. Wilson’s cat being caught in a tree …

Okay, I digressed a little on the cat in the tree.

Is this really in the public’s interest in broadband services or the use of spectrum for that matter? The problem with the public interest standard at the Federal Communications Commission is that it looks at the airwaves as something primarily for consumer consumption. Big mistake. As guardian and gatekeeper of a public resource, it should look at the airwaves as a national resource that we use to produce output. As a creature of the Congress, the FCC should analyze the public interest in terms as a regulator of commerce.

Spectrum is a conduit in the flow of commercial activity; the movement of goods and services. The primary good or service carried through this conduit is information. The conduit is indifferent to the information. It’s indifferent to whoever is selling and buying it. This is why burdening access to and use of spectrum with consumer concerns is pointless.

The only public interest standard that should matter is whether access to the air waves is being put in the hands of the carriers that will use it best, and that these carriers do indeed put spectrum to use.

The Federal Communications Commission issued final rules for channel sharing. The rules are the result of the recently passed Jobs Act that provides for voluntary incentive auctions of broadcast spectrum.

The FCC stressed that channel sharing is voluntary and that broadcasters and other licensees of spectrum will determine whether they want to enter into sharing arrangements. The FCC expects channel sharing to free up spectrum for wireless broadband providers.

Channel sharing doesn’t mean that an over-the-air broadcaster’s only option is to give up its entire spectrum and go out of business. Broadcasters should be able to retain just enough spectrum for one standard definition program stream, while sharing the rest of its 6MHz channel.

Overall, sounds like a non-intrusive policy for freeing up some spectrum for the mobile types while keeping the over-the-air broadcasters operational.

It looks like Congress may be headed to signing off on a payroll tax extension. Unfortunately for broadband consumers, the package includes allowing the Federal Communications Commission the flexibility to impose on large carriers, such as AT&T and Verizon, conditions designed to ensure competition should carriers win bids for broadcast spectrum.

Allowing larger companies to bid is the appropriate approach this legislation should take. I’m still not comfortable with a regulatory agency creating conditions that ensure competition. If those conditions were to give Sprint and T-Mobile, two companies that have taken mismanagement to a new level, some additional advantage, you may as well keep more efficient and better managed carriers from bidding for spectrum.

The Wall Street Journal reported today that some lawmakers would like to use proceeds from spectrum auctions to pay for portions of the payroll tax extension package. They would like to see some of the bid money going to offsetting the renewal of unemployment benefits and upward adjustments Medicare payments to health care providers.

The irony of the proposal is that some of these same lawmakers wish to draft legislation that would keep large wireless carriers such as AT&T and Verizon from participating in volunteer incentive auctions where carriers could bid on spectrum licenses given up by broadcasters. Keeping out the large carriers poses two problems.

First, like I’ve blogged about before, keeping out large carriers reduces the chance that spectrum is being put to its best use. Carriers willing and able to pay premium cash for the licenses would be left out.

Second, if you leave out the big guys with the deeper pockets, it means less money being used to offset Medicare payments and jobless benefits.

The notion that Congress would use these monies to fund welfare programs is not sound. Congress, who should be well aware of the limited availability of spectrum, should instead let these funds stay with the Federal Communications Commission. These funds could be used to leverage incentives for deploying more broadband infrastructure, a much better approach to growing the economy than funding jobless benefits.

Blair Levin stated during the Minority Media and Telecommunications Council’s Broadband and Social Justice in support of incentive auctions as described in S.28, the Public Safety Spectrum and Wireless Innovation Act. The Act allows broadcast stations that voluntarily give up some of their spectrum to collect part of the bid proceeds, while the remainders of the proceeds are placed into funds that would be used to build out broadband facilities in rural areas as well as fund an interoperable public safety network.

Mr. Levin indicates that he has no problem with the Federal Communications Commission exercising flexibility in allowing its staff to “develop options and then allow the political leadership, both at the FCC and the Congress to apply their policy preferences.”

The bill specifically allows the FCC to “determine, at its discretion, what new use that the Commission determines, in its discretion, are attributable to the licensee’s relinquished spectrum usage.”

My take on the language is that it’s too vague. The Senate Committee on Commerce, Science, and Transportation could tighten this bill up by amending the language to reflect the specific uses of the freed up spectrum i.e., mobile wireless telecommunications, and that the FCC will not prevent any wireless company with the technical and financial resources from participating in an incentive auction.

Why is this important? Because it ensures that all competitors are able to obtain this resource so that they can compete in the wireless market and provide consumers additional choice. You can’t call an auction a competitive mechanism for distributing spectrum if you are not ensuring each company has a chance to bid for spectrum.