Quick 700 MHz Auction Could Give Big Carriers Big Advantage, Adelstein Says

Comr. Adelstein Tues. urged caution on the start of the 700 MHz auction. He said he favors an early auction, but rural and small carriers will need more lead time than their larger counterparts to line up financing. Sources told us they expect rules for the auction to be released in April, and the auction to be held in the fall. Adelstein also said after a presentation to the Freedom to Connect conference he hasn’t decided whether Carterfone rules should apply to wireless.

Adelstein said he hasn’t decided how much time should be allowed between the release of rules and the auction, but he said he’s concerned about small companies’s ability to line up financing. He noted that some small carriers want 6 months or more between the release of rules and the auction’s start. Chmn. Martin has said the auction could start as early as Aug. Comr. McDowell last week urged that the auction begin in Sept. (CD March 2 p3).

An early auction would benefit large carriers, Adelstein said. “We've got to make sure we give [small carriers] time to develop business plans and access to capital.”

A major question in recent weeks has been whether Carterfone rules should apply to wireless, a debate that comes as the FCC considers reclassifying wireless broadband as an information service. Adelstein told reporters he has reached no conclusions: “I'm still thinking that through.” The Commission must weigh the “competitiveness” of the wireless industry vs. customers’ “love of flexibility,” he said. Adelstein’s comments were similar to those by Martin, who said last month the FCC must strike an “appropriate balance” between “innovation” by equipment makers and carrier “investment” in their networks (CD Feb 26 p1).

Meanwhile, Adelstein said he hopes the FCC will release a notice of proposed rulemaking on net neutrality rules. He said release instead of an NOI asking general questions about net neutrality would have to be viewed as a “delaying tactic.” “We've debated it for many years… It’s ripe,” he said.

Adelstein said he was pleased with the net neutrality provisions in the AT&T-BellSouth merger order. “We took a small step in the… merger, and whether it ends up being a giant leap forward remains to be seen,” he said. Adelstein said Martin has committed in congressional testimony to enforcing the net neutrality provisions in the order: “He told me that personally, too.”