Update on FCC's historic Secondary Markets Order Adopted Today

[Dave Farber <dave () farber net>]

------ Forwarded Message
From: Dewayne Hendricks <dewayne () warpspeed com>


[Note:  Here's friend Michael Calabrese's take on the FCC's Secondary
Market Order.  DLH]

At 12:46 -0700 5/15/03, Michael Calabrese wrote:
> From: "Michael Calabrese" <Calabrese () newamerica net>
> Subject: Update on FCC's historic Secondary Markets Order Adopted Today
> Date: Thu, 15 May 2003 12:46:12 -0700
> MIME-Version: 1.0
>
> The FCC today adopted an Order to facilitate secondary markets for
> spectrum that has very important long-term implications for spectrum
> allocation (links below).
>
> The new rules would allow companies to rent out unused spectrum for
> short or long periods of time and is designed to promote more
> efficient/flexible use of existing spectrum.  While we support
> flexibility and secondary markets, the Order is part of a pattern
> whereby the FCC usurps Congressional authority -- and steadily
> transfers the value of the public airwaves as a windfall to
> incumbents, constraining as well the government's future ability to
> to change license rights to accomodate greater unlicensed sharing
> responsible for WiFi and low-cost wireless last-mile connections.
> Services like fixed wireless - that never paid for spectrum access -
> can now become absentee landlords and collect rents while paying
> nothing back to the public.
>
> There was some good news: late last night -- under pressure from
> Commrs. Copps and Adelstein -- the majority agreed to drop
> provisions in the NPRM that would have: allowed TV and radio
> broadcast licensees to lease to non-broadcast companies; which could
> have eliminated designated entity and entrepreneur preferences for
> small business; and which would have allowed licensees to mortgage
> their licenses (as property interests) to raise capital.
>
> Nevertheless, the Order adopted is very problematic in at least two respects:
>
>    First, as Copps stated, while enabling secondary markets may
> be good policy, the FCC is bending the law.  Sec. 310(d) clearly
> requires a public interest determination before license rights are
> transferred by a licensee. The Order requires no approval for
> subleasing -- and even a complete transfer of a license is subject
> to a 21-day automatic approval process. Instead of piecemeal reforms
> that distort Congressional intent, Congress should enact a more
> coherent new framework that exchanges flexibility and leasing for
> spectrum user fees to the public.
>
>    Second, as the FCC grants BOTH leasing and flexibility to
> licensees who received spectrum free, the COMBINATION eventually
> amount to a massive giveaway of the asset's value AND constrain the
> public's ability to redefine license rights to promote efficient
> band sharing by emerging unlicensed and smart radio technologies
> (e.g., WiFi). In combination, flexibility and secondary markets will
> serve to ENTRENCH incumbents. Incumbents not only acquire expanded
> usage rights to the entire bandwidth (rather than to what's needed
> to provide the allocated service), but incumbents will now have
> EVERY INCENTIVE to hoard and hold on to their rights forever (since
> they step into the shoes of the FCC and can both decide what uses
> and receive the rents).
>
> FCC Adopts Spectrum Leasing Rules and Streamlined Processing for
> License Transfer and Assignment Applications,
> and Proposes Further Steps to Increase Access to Spectrum Through
> Secondary Markets.
>
> News Release
> http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A1.pdf
>
> Copps Dissent:
> http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A4.pdf
>
> Powell and Martin Joint Statement:
> http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A2.pdf
>
> Abernathy Statement:
> http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A3.pdf
>
> Adelstein Statement:
> http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-234562A5.pdf
>
> Michael Calabrese
> Director, Spectrum Policy Program
> New America Foundation
> 1630 Connecticut Ave, NW
> 7th Floor
> Washington, DC  20009
> (202) 986-2700
> Fax   986-3696

Archives at: <http://Wireless.Com/Dewayne-Net>
Weblog at: <http://weblog.warpspeed.com>


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