Consumer groups: FCC spectrum ruling a mixed bag

A U.S. Federal Communications Commission decision Tuesday on wireless spectrum action rules is a “mixed bag” for customers, some advocacy groups said.

[ See related: FCC embraces open access for 700MHz auction ]

The FCC voted to require so-called open-access rules on 22MHz of the 62MHz of spectrum to be auctioned by early next year. The winner of that chunk of spectrum will be required to accept outside wireless devices such as mobile phones, and will be prohibited from blocking or slowing wireless and Web content from competitors.

But the FCC declined to adopt rules that would require the auction winner to provide wholesale access to competing wireless and broadband providers, a rule supported by groups such as Public Knowledge and Consumers Union, as well as Google.

“Consumers should be pleased with part of the FCC’s decision today,” said Gigi Sohn, president of Public Knowledge. “In the new wireless services created as a result of this decision, they won’t be forced to abandon cell phones or other devices they have purchased when they change service providers.”

But the FCC will lift those conditions if a reserve price for the spectrum isn’t met. “This condition leaves a broad opening for the industry to avoid these pro-consumer policies,” Sohn said.

The lack of a wholesale access rule also limits the benefits, she said. “The commission’s actions are a split decision for consumers because the commission had the potential to do so much more,” she said. “While Chairman Martin and some of the other commissioners spoke about the potential to help consumers by creating more competition for high-speed Internet services, at the end of the day they did nothing about it.”

Others said the open-access rules would limit bidding for the spectrum block. FCC commissioner Robert McDowell said the auction conditions will drive large wireless and broadband providers to other sections of the spectrum auction made available for regional bidding. Small wireless and broadband providers will be outbid on those regional spectrum auction, he predicted.

The commission is hoping that a “single white knight” will bid on the 22MHz block, but no company has committed to bidding, he said.

Other commissioners created a “highly tailored garment that may fit no one,” he said.

FCC chairman Kevin Martin, like McDowell a Republican, said the commission’s goal wasn’t to please any wireless or broadband provider. “The public interest is not about what any company wants,” he said. “It’s about serving the people.”

Scott Cleland, chairman of NetCompetition.org, an advocacy group against auction conditions, predicted the 22MHz may not attract enough bids. “There is a very substantial risk that this becomes known as the ‘do over’ FCC auction,” he wrote on his blog. “First, to any outside observer, the FCC’s highly tailored auction rules appear to have a pretty obvious ‘set aside’ for the Google camp and its proposed net neutrality/open access business model for a third of the 700MHz spectrum.”

But Janice Obuchowski, chairwoman of Frontline Wireless, generally praised the FCC’s decision. The commission largely endorsed a Frontline plan for part of the spectrum that would allow the winning bidder on 10MHz of spectrum to pair that with 12MHz set aside for public safety agencies.The winning bidder would then be required to build a broadband network that serves both public safety and commercial users.

“We’ve come a long way,” Obuchowski said. “We’re ready for the auction. We will be a bidder.”