Supporting existing and new wireless broadband providers is key to encouraging broadband competition, the U.S. Department of Justice advised the U.S. Federal Communications Commission on Monday.
In a filing submitted in response to an FCC request for comments on its national broadband plan, the DOJ said that it’s unrealistic to try to promote “textbook markets of perfect competition” since the provision of broadband services is so costly. “Rather, promoting competition is likely to take the form of enabling additional entry and expansion by wireless broadband providers,” among other activities, the DOJ wrote.
That means the FCC must work hard to quickly make more spectrum available for wireless broadband services, the agency said. “We urge the Commission to give priority to making more spectrum available to wireless broadband providers so as to maximize their potential to compete against the established wireline ones,” the DOJ wrote. “There is no time to spare.”
Once the FCC identifies and frees up new spectrum, it should devise a way to ensure that new, competitive providers win the spectrum, the DOJ said.
That’s been a thorny issue historically and the DOJ didn’t seem to have a great solution to the problem. The FCC could run an auction where incumbents’ bids are discounted — not in terms of what they pay but in order to determine who wins. But the FCC would have to be able to figure out by how much to discount the bids, the DOJ said.
The DOJ also said that the FCC could simply make the spectrum available only to new competitors, but the agency doesn’t recommend that idea.
In the mid-1990s, the FCC attempted to do just that to disastrous consequences. It set aside a portion of the spectrum that only minority-run and small businesses could bid on. Years of legal challenges followed the auction such that only one or two of the spectrum winners actually built small networks.
The DOJ also urged the FCC to work to spur secondary spectrum markets. That would allow owners of unused spectrum to rent out the spectrum to companies eager to use it.
In addition to its spectrum recommendations, the DOJ also suggested that the FCC work on ways to encourage transparency in the way that broadband providers describe their services.
“Notably, the Commission should address carriers’ frequent claims to provide broadband connectivity ‘up to’ particular levels of bandwidth without disclosing average speeds,” the DOJ wrote. The FCC could create a “disclosure regime,” much like the one that requires food makers to place nutritional information on their products, the DOJ said.
The FCC plans to submit its national broadband plan to Congress by mid-February.