FCC Auction Rules Offer Easy Escape

Published August 6, 2007

The requirements the FCC created for the 2008 auction of spectrum for wireless services (“FCC Backs Spectrum Open Access,” Aug. 1) provide a loophole through which Google’s market cap could fit.

Although the rules call for the winner of a 22 MHz block of the coveted spectrum to allow any phone, device, or application to work within that group of frequencies, they also hedge, stating this network neutrality requirement is “subject to certain reasonable network management conditions that allow the licensee to protect the network from harm.”

“Reasonable” is delightfully elastic. If the network repeatedly crashes because too many users are downloading too many videos using devices not optimized for 700 MHz wireless systems, the licensee is free to fall back on more established bundled business models, which assure the device, the network, and the application work properly. Recall that the FCC built a similar back door into the network neutrality provision it demanded of AT&T in return for approving the BellSouth acquisition, exempting video and wireless–the two services that critics warn net neutrality will most detrimentally affect–from the order.

Despite the support FCC Chairman Kevin J. Martin voices for network neutrality, the easy escape clauses he builds into the rules betray a lack of faith that these intrusive Internet regulations are correct policy. He should respect those doubts.

Let the winners choose their business models. Regulation by lip service is no way to administer an auction.

Steven Titch ([email protected]) is senior fellow for IT and telecom policy at The Heartland Institute.