The 700 MHz spectrum license auction, which begins later this month, was a big topic in the chat between FCC Chairman Kevin Martin and CEA president and CEO Gary Shapiro this morning at CES. Martin said that the DTV transition in February 2009 is “hard date,” and opening up the spectrum for wireless broadband is a key part of the future of communications in the US.
700 MHz auction: Martin said his and other commissioners’ experiences at last years’ CES helped shape some of their positions on the 700 MHz spectrum license auction, which begins later this month. In particular, the talk of the difficulty of getting new services and devices onto wireless networks helped lead the Commission to put open-access rules on one of the blocks of licenses. He also talked about the importance of adding buildout requirements to the licenses in the auction: “We put very strict buildout requirements in because we want people to be buying spectrum and building it out and putting it to use,” Martin said, and not just buying it up to stockpile it and keep it out of others’ hands. He later added that the 700 MHz spectrum is important for building out the US’ broadband footprint.
XM-Sirius (NSDQ: SIRI) and Echostar-DirecTV: Shapiro attempted to draw Martin on whether approval of the XM-Sirius merger would bode well for a merger between Echostar (NSDQ: DISH) and DirecTV (NYSE: DTV). Martin wouldn’t talk about the pending approval of the satellite radio merger, but spoke about how XM (NSDQ: XMSR) and Sirius said they’d offer different subscription and content plans to consumers, allowing them more choice over the content they receive at a variety of price points. The implication was that this was an important declaration by the radio companies in terms of their chances of regulatory approval, and Martin said that it would be important for satellite TV companies to offer consumers more control and choice as part of any future merger plans. More in extended entry…
On ISP traffic blocking: Shapiro brought up consumer groups’ complaint to the FCC about Comcast (NSDQ: CMCSA) blocking BitTorrent traffic; Martin said network operators should be able to use “reasonable network management practices”, but should declare those practices openly and transparently. Martin also said the FCC will investigate the situation to see if anyone is being discriminatorily blocked, and it has the power to act, if so.
Open, open, open: Martin said that the push for openness is an important one for wireless, cable and other networks, and that the ultimate end goal is networks that operate like the traditional phone network, where users can attach any compatible device, but stressed that’s an incremental task. “We have to make sure we put in place the building blocks to make sure [the opening of wireless networks] is real,” he said. “Are we there yet? No. But there’s a common goal everyone agrees on.”
On fair use: Martin stressed the importance of maintaining consumers’ fair use rights, but said it must be balanced with some protection for content companies. “What the content companies have a legitimate concern about is that you don’t want to allow a consumer to turn into a broadcaster of content,” Martin said. “I do believe that fair use and what consumers are able to do within their home and their device needs to be protected… Consumers have an expectation that’s reasonable and fair that they’ll be able to use content.”
White-spaces spectrum: The FCC will begin testing of new devices “very shortly” to see if they can not interfere with existing broadcasts, after failed test of first round of white-spaces devices. Martin said he wants to ensure that spectrum is being fully utilized and not wasted in any given market, but said that can’t come at the expense of interfering with existing spectrum holders’ broadcasts.
A la carte cable pricing: Martin said he’s doing “everything he can” to bring about a la carte pricing, and that cable rates have doubled since the Telecommunications Act of 1996 was put into place, while prices of everything else under the FCC’s purview has fallen. A la carte is the ideal answer to consumer complaints about cable pricing, since it would allow them to pay for only what they want, and if individual channel prices are too high, they won’t pay them, making a la carte a “true market” solution.
What’s big in 2008? The 700 MHz spectrum will dominate January and February, as well as the one-year countdown to the February 2009 DTV transition. Also important this year for the FCC will be revamping the FCC’s broadband deployment data so it can better understand the penetration of high-speed internet access. Consumer issues including traffic blocking will also be big this year.