The Federal Communications Commission may like net neutrality for broadband providers but when it comes to its own gate-keeping rule, equal access to spectrum auctions is not the FCC’s cup-of-tea. The Hill.com is reporting that a number of GOP congressmen have written the FCC to urge the regulator to take off the reins on AT&T and Verizon and allow them to bid on broadcaster spectrum without being foreclosed by a revenue floor.
“Under Wheeler’s plans, some companies — especially AT&T and Verizon — would be kept from bidding on certain blocks of airwaves in each market once that auction has reached a yet-to-be-determined revenue benchmark”, reports Kate Tummarello. “This is not how a market-based auction should function; it is how a cartel controls price.”
Cartel is probably the wrong phrase. A cartel by definition is a group of firms with an explicit formal agreement to fix prices and output shares in a particular market. There is no explicit agreement between the FCC, Sprint, and T-Mobile to fix any prices (I would hope). Besides the FCC is not a firm and would not benefit financially from any price fixing, even if in the form of discounts to Sprint and T-Mobile; discounts because AT&T and Verizon would be locked out of offering a premium on top of any market price for the spectrum.
The FCC’s projected action would keep the market from searching for, identifying, and determining market signals and prices.
No, the FCC is a monopoly. It controls the distribution of spectrum licenses, even those in the secondary markets since it must approve spectrum transfers. While monopolists do sell the same product to different markets at different prices (think of the electric utilities that Susan Crawford is so fond of), they don’t restrict customers from entering a market.
What the FCC needs to practice is spectrum neutrality. All wireless carriers get to show up and engage in the sale and the purchase of spectrum. There is no logic to restricting access to an auction unless you simply want to the FCC to make the least amount of money for its efforts?