[IP] 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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