FCC’s O’Rielly Warns Against Airwave Auction Restrictions

The newest Republican FCC commissioner pushes for Verizon and AT&T access to airwaves.

FCC Chairman Tom Wheeler swears in Commissioner Michael O'Rielly
National Journal
Brendan Sasso
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Brendan Sasso
Jan. 27, 2014, 7:12 a.m.

Mi­chael O’Ri­elly, a Re­pub­lic­an mem­ber of the Fed­er­al Com­mu­nic­a­tions Com­mis­sion, warned his agency on Monday not to ad­opt “un­due” re­stric­tions in the up­com­ing auc­tion of air­wave li­censes.

“I also feel strongly that the Com­mis­sion must not im­ple­ment rules de­signed to pre­or­dain auc­tion res­ults or place un­due re­stric­tions on li­censes,” O’Ri­elly said in his first ma­jor policy speech at the Hud­son In­sti­tute, ac­cord­ing to a copy of his pre­pared re­marks.

“Such ef­forts have failed in the past. And now, more than ever, we can­not af­ford to di­min­ish par­ti­cip­a­tion or rev­en­ues. In­stead, the Com­mis­sion must al­low li­censes to go to their highest val­ued use and en­sure spec­trum flex­ib­il­ity.”

The FCC is pre­par­ing to buy back the broad­cast li­censes of some TV sta­tions for auc­tion to cel­lu­lar car­ri­ers. The ad­di­tion­al air­waves, known as spec­trum, will help the cel­lu­lar car­ri­ers meet their cus­tom­ers’ skyrock­et­ing de­mand for mo­bile data.

Sprint, T-Mo­bile, and many Demo­crats are ur­ging the FCC to lim­it the abil­ity of AT&T and Ve­r­i­zon to bid in the auc­tion. They warn that if the FCC doesn’t im­pose re­stric­tions, the two largest play­ers could buy up enough spec­trum to ce­ment their dom­in­ance of the in­dustry and kill off com­pet­i­tion.

But O’Ri­elly said that re­stric­tions could re­duce the value of the spec­trum and sup­press gov­ern­ment rev­en­ue from the auc­tion.

FCC Chair­man Tom Wheel­er has not de­clared where he stands on the is­sue, but he has hin­ted that he is open to auc­tion re­stric­tions, say­ing he wants to en­sure that “mul­tiple car­ri­ers have ac­cess to air­waves needed to op­er­ate their net­works.” O’Ri­elly is one of two Re­pub­lic­ans on the five-mem­ber com­mis­sion.

O’Ri­elly also em­phas­ized that for the auc­tion to suc­ceed, the FCC must make the pro­cess as simple as pos­sible to en­cour­age par­ti­cip­a­tion by TV sta­tions.

In his first ma­jor policy speech, the agency’s new­est Re­pub­lic­an laid out his con­ser­vat­ive views on a host of oth­er is­sues be­fore the com­mis­sion.

He claimed the FCC has “ab­used” its power to reg­u­late the In­ter­net un­der the Tele­com­mu­nic­a­tions Act. The D.C. Cir­cuit Court of Ap­peals struck down the FCC’s net neut­ral­ity rules earli­er this month. Al­though O’Ri­elly is a crit­ic of the rules, he ex­pressed dis­may at the rul­ing be­cause it largely left the FCC’s au­thor­ity over the In­ter­net in­tact.

The rules re­quired In­ter­net pro­viders to treat all Web traffic equally, but O’Ri­elly pre­dicted that the de­mise of the reg­u­la­tions won’t mean that pro­viders will be­gin block­ing or de­grad­ing ac­cess to web­sites.

“I don’t see the mar­ket­place dra­mat­ic­ally chan­ging go­ing for­ward,” he said. “I would be re­luct­ant to im­pose new ob­lig­a­tions in this space.”

O’Ri­elly hin­ted that the agency should re­lax its me­dia own­er­ship re­stric­tions, say­ing the rules should be up­dated to “re­flect the real­it­ies of today’s me­dia mar­ket­place.” He ar­gued that the FCC must be more mind­ful of the size of its Uni­ver­sal Ser­vice Fund, which pays for a vari­ety of fed­er­al pro­grams through fees on monthly phone bills. He said the agency should re­form how it col­lects money for the fund, but sug­ges­ted that he would not be open to im­pos­ing fees on broad­band In­ter­net ser­vice.

The FCC is pre­par­ing to move ahead with tri­als for trans­ition­ing phone lines to In­ter­net-based net­works. Many con­sumer ad­voc­ates want to en­sure that the agency main­tains ad­equate reg­u­la­tion of the new net­works, but O’Ri­elly said the FCC “must en­sure that its policies and reg­u­la­tions do not im­pede this in­nov­a­tion so that pro­viders are free to im­ple­ment the latest tech­no­lo­gies and ser­vices.”

“We should take this op­por­tun­ity to see how many reg­u­la­tions we can do without, such as ar­cane reg­u­lat­ory ac­count­ing and jur­is­dic­tion­al sep­ar­a­tions,” he said.

O’Ri­elly ir­rit­ated some Demo­crat­ic sen­at­ors at his con­firm­a­tion hear­ing last year when he an­nounced that he would “stand strong for free­dom.” Demo­crats wor­ried the state­ment soun­ded like the ral­ly­ing cry of a hard-core con­ser­vat­ive.

He ended Monday’s speech with an at­tempt to ease con­cerns about his par­tis­an­ship.

“When I use the word free­dom, I do not mean to im­ply that I hold a mono­poly or trade­mark on this value. I have seen throughout my pro­fes­sion­al ca­reer that the ro­bust ex­change of ideas and bi­par­tis­an com­prom­ises can bring about the best policy res­ults,” he said.

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