Today's Senate Commerce Committee hearing on the 700 MHz auction, in a nutshell:
The auction is broadly seen as critical to our shared communications future, but there's very little agreement about how all the pieces fit together. My prediction: some delay in the promulgation of the auction rules. There's too much at stake and too little shared territory. Sen. Rockefeller noted that the consequences of the auction are enormous, but the public doesn't understand the issue and committee attendance is sparse.
1. Public safety. Although many agree that a national broadband network controlled by public safety would be a good idea, not everyone does. The NYC witness, Paul Cosgrave, says that NY has already built its own network, and he doesn't want to be forced to adopt nationwide standards and choose particular spectrum. He doesn't think one size fits all. On the other hand, he agrees with the notion that a national network won't happen without a substantial assist from private industry, and he concedes that cooperation among public safety actors isn't currently optimal. McCarley, from Texas, thinks that a public-private partnership makes sense as long as the network is built to public safety specifications and controlled by a strong public safety (unitary) actor.
2. Frontline. Sen. Stevens, it's fair to say, is irritated by the very idea of auction rules that would condition award on agreement to the Frontline plan. His “dialogue” with Barksdale was surprisingly uninformed – Frontline has clearly said that compliance with CALEA and E911 is part of its plan, and no one thinks that an auction using the Frontline-proposed rules for just 10MHz of the spectrum will result in less competition on any metric. There will be bidders other than Frontline. Barksdale was emphatic and authentic – a busy, experienced guy who seems to be doing this because he actually cares about the subject.
Stevens would rather have NO auction rules and give $5 billion to
public safety to start building their own network. Barksdale shot back
that $5 billion wouldn't be nearly enough.
Sen. Dorgan took his time understanding the Frontline proposal, and seems to appreciate that it's complicated and clever. I didn't get the sense that he would embrace the plan right now.
The Frontline plan was framed by a few speakers, particularly Lynch from Verizon, as supporting “net neutrality” (told you this would happen). Verizon's view is that the Frontline plan won't help innovation or consumers. Lynch points out that public safety doesn't like open access, “and as an operator I don't like these rules either. They'll reduce interest in spectrum, and won't allow us to manage our networks” to prevent spam, viruses, and monopolization of the network by hogging-devices. Verizon likes band plan 3 (in the weeds – I'll describe someday).
3. Entrepreneurial energy. The only real entrepreneur who spoke was Amol Sarva of Txtbl, who is pointing out that wireless carriers are constraining innovation along many vectors. He wants open access rules applied to 10 MHz, and dynamic auctioning rules applied as well. He suggests that America lead the way in innovation.
Bottom line: many pieces to play with, and not a lot of time. According to the statute, the auction has to start in late January 2008, and players need several months to get ready. A nationwide new-energy wireless broadband network faces many obstacles at this point.
