Spectrum-Aggregation Limits Are Good For Public Safety

August 28, 2013

In 2012, Congress passed legislation on the creation of a nationwide public safety broadband network.  And in 2013, the FCC is moving closer to providing rules around the 600 MHz broadcast incentive auction. These separate matters have two important connections.   First, proceeds from the 600 MHz auction, and half a dozen other upcoming spectrum auctions, are to be directed to help build a Public Safety Broadband Network (PSBN), managed by the First Responders Network Authority, or “FirstNet.”  Second, ensuring all carriers have access to 600 MHz spectrum, which can travel farther in rural areas and penetrate deep into buildings in urban areas, will create multiple alternative commercial networks for first responders and FirstNet.

The best way for the FCC to ensure adequate funding for FirstNet, as well as the deployment of strong competitive commercial networks with diversity and redundancy, is to adopt rules that promote competitive spectrum auctions. The two largest wireless carriers already control nearly 80 percent of the spectrum below 1 GHz in the United States, and the U.S. Department of Justice has found that without spectrum-aggregation limits in the 600 MHz auction, AT&T and Verizon have the ability to shut out rivals almost entirely from the frequencies most capable of supporting robust wireless communications. Not only will this deny other carriers reasonable access at auction to the kind of spectrum that best traverses wide swaths of countryside and penetrates deep into buildings, but also it will decrease the number of potential carrier partners for FirstNet deployment and services.  Excessive reliance on a duopoly is good for no one, especially public safety, who need alternatives during disasters. 

T-Mobile has recommended reasonable spectrum-aggregation limits in the 600 MHz auction. Under these proposed rules, AT&T and Verizon would be allowed to bid in every market, but they would not be able to buy up all the low-band 600 MHz frequencies, leaving none for competitive providers. Although the nation’s two largest carriers have claimed that even these minor restrictions could lead to reduced auction proceeds, the opposite is true. Reasonable limits will attract bidders to the auction and if more bidders chase the same number of licenses, prices will rise. By contrast, auction revenues will decline if smaller carriers do not participate or curtail their participation in the 600 MHz auction because the two dominant incumbents are permitted to shut out others from winning the licenses needed to compete. 

We also believe employing a tool in the auction design to help ensure revenues sufficient to satisfy potential FirstNet funding concerns makes sense.  Under T-Mobile’s proposed Dynamic Market Rule, the FCC can run the auction with aggregation limits, but if revenues unexpectedly fall short of targets, the FCC can allow bidders to exceed the aggregation limit. The proposed rule would facilitate competitive networks while helping to ensure the revenue needed to construct and operate a standalone public safety broadband system.

Spectrum-aggregation limits will help sustain multiple, overlapping commercial networks to enhance emergency communications, as well as increase the auction revenue our nation’s first responders need to build out a mobile public safety broadband network of their own. In this case, good consumer policy is also good public safety policy.