FCC May Delay Next-Generation Wireless Auction

FRAMINGHAM (05/02/2000) - The Federal Communications Commission can delay an auction of next-generation wireless spectrum until at least the fall, when the regulatory agency will attempt to resolve concerns raised by carriers and broadcasters.

A spokesman for Rep. Billy Tauzin, (R-Louisiana), chairman of the House Telecommunications Committee, said, "Billy thinks it makes sense to delay the auction until we can develop a sound spectrum policy." Congress mandated that the FCC conduct the auction for spectrum currently occupied by television channels 60 to 69 for wireless services in time to deposit proceeds in federal government coffers by Sept. 30, the end of this fiscal year.

The U.K. last week raised $35 billion from an auction of similar spectrum, and analysts have projected proceeds from a U.S. auction could top $100 billion.

But "we just can't auction spectrum to balance the budget" without first addressing issues raised by the television broadcasters using channels 60 to 69 and by the carriers who want to bid on the spectrum, the Tauzin spokesman said.

The National Association of Broadcasters, in a letter to FCC Chairman William Kennard in February, said that conducting the auctions could "contravene" Congressional directions to ensure television stations can continue to use those channels to provide analog television service until the switch to digital television is completed.

BellSouth Corp. in Atlanta, US West Inc. in Denver and Verizon Wireless in New York, have all asked the FCC to delay the auction. In a letter to Kennard last week, US West said a delay "would allow the Commission time to conclude expedited rule-making processing that would facilitate clearing broadcasters" from the spectrum to be auctioned.

Julia Kane, US West corporate counsel, said in her letter to Kennard that "significant challenges" exist that could preclude wireless carriers from quickly offering services in the channels 60 to 69 band after they win the auction. The FCC has said the broadcasters don't have to vacate their channels until 2007 "We are extremely concerned about he possibilities of hold-out situations requiring payments of substantial premiums to clear the spectrum, as well as the daunting prospect of having to negotiate with broadcasters individually, which could delay services," Kane said.

Kennard, in a letter to key congressional committees last week, said he had "serious concerns about the compressed timing."

The Tauzin spokesman said the Telecommunications Committee is considering holding a hearing to resolve the conflicts between the broadcasters and potential bidders.

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