Bruce Mehlman points out in recent blog post that the FCC cannot have it both ways. It cannot label an auction process as competitive and then support an egregious barrier to entry by allowing some companies to bid on spectrum and leaving others on the sideline.

A participant in a free market enters with a willingness and ability to sell or buy goods and services.

Should spectrum go to the entity indicating through the highest bid, that they have the capacity to purchase and use spectrum?

Grover Norquist co-authored a piece criticizing the FCC’s foot-dragging on the issue of spectrum access. As a case study, Mr. Norquist refers to the challenges LightSquared is facing from other agencies while the FCC apparently is looking the other way. According to Mr. Norquist, the FCC is pulling a John Kerry double take: I was for LightSquared building a $14 billion 4G network before I was against LightSquared building a $14 billion network.

I did appreciate Mr. Norquist’s take on the FCC’s push for rules that would basically allow the agency to choose to whom spectrum will go and to decide who gets to bid on it in the first place. What the FCC is signaling is not competitive bidding. The FCC should not be picking winners and losers. The Japanese did something similar in the 1990s; picking the industries they felt should survive.

Have you heard of the Lost Decade? This type of economic strategy didn’t help Japan pull out of its economic and financial doldrums. Why should we expect picking favorites to work here in the U.S.?

A great post (as usual) from the crew at The Motley Fool describing T-Mobile’s preference for a little Federal Communications Commission interference in auctions. T-Mobile would like the FCC to be able to manage the auction of broadcast station spectrum in a way that allows the regulatory agency to determine who would be eligible to bid on spectrum. In short, under a preferred FCC scheme, the FCC could tell Verizon or AT&T to go away.
It sounds like the FCC would like to determine a new class of eligible or designated entities; a class that does not include large players like AT&T and Verizon.

If there are any changes in the rules, the changes should be made to strengthen and make clear the word “competitive”. Competitive means being able to take your capital and leveraging and moving it to activities that provide it the highest returns.

The FCC should be leveraging its authority to grant access to spectrum the same way. It should ensure that any technically proficient carrier be able to bid for and receive a license to provide wireless services.

Discriminating against wireless carriers that happen to be owned by landline carriers (an approach Sprint seems to endorse) should not be a policy that the FCC promotes.

Hal Singer in his blog post, “Divining a Regulator’s Intent“, could not have said it better.

“The singular objective that should drive the Commission in all matters wireless is getting spectrum into the hands of firms that value it the most.”

No truer words have been said about the role of government in general, and the role of the Federal Communications Commission in particular.

FCC chairman Julius Genachowski appeared to signal that he’d like to pull another end around Congress, this time on the matter of writing and implementing the guidelines for a voluntary incentive auction that would see broadcasters giving up spectrum in return for fair compensation. Mr. Genachowski believes that “Giving the FCC the authority to implement incentive auctions with flexibility to design appropriate rules would increase social welfare.”

If Mr. Genachowski is really interested in a regulatory scheme that increases social welfare, he would not want a scheme where an agency picks the winner of an auction based on the agency’s “flexibility to design appropriate rules.” Instead he would encourage Congress to write clear, to the point statutory language that mandates spectrum going to the highest bidder. The wireless carrier showing their willingness to invest a premium in a national resource such as spectrum is signaling their immediate intent to use it.

Picking winners only increases the likelihood of a ripple effect of inefficiency running through the wireless industry. This will likely be the result of the FCC trying to replace price as the mechanism for distributing capital and resources with the agency’s determination as to which carrier should get spectrum. This is not how you increase social welfare.

There shouldn’t be a problem with a “publisher” or “messenger” combining various media platforms to push their message out. This is the real issue the Supreme Court should be addressing.

Let’s be honest. Publishers have competing messages they want to sell in order to meet consumer demand for those messages. The right mix of platforms helps to control the costs of getting the message out to the most people in the market.

There are over 300 million potential message publishers here in America alone. Let the entrepreneurial will of each messenger and the market determine the number of commercial voices serving a market. This is an area that the FCC needs to extract itself from.