Mobile Future filed a paper at the FCC questioning the net effect of bidding limits the Canadian government imposed in two recent spectrum auctions -- AWS spectrum in 2008 and 700 MHz spectrum this year. “The analysis concludes that exclusionary auction rules, such as spectrum set-asides or caps, prevent efficient competition and hinder investment in the state-of-the-art wireless networks and services that consumers are demanding,” Mobile Future said (http://bit.ly/1fltxzo). “These asymmetric rules essentially add up to public subsidies that are wasted on either established players who would have bid vigorously at full market value or lost to new entrants that, similar to the European experience with preferential rules, consistently fail.” The paper cites as an example Quebecor’s purchase of licenses outside its home market in Quebec. “Quebecor has made clear the spectrum, which had no other significant bidder, was acquired for its ‘advantageous price,’ with the CEO publicly stating that it remains uncertain if it would ’sit’ on the spectrum or ‘do something with it,'” Mobile Future said. “At this stage, few analysts expect Videotron, which is owned by Quebecor, to develop a network outside of Quebec."

The FirstNet board Monday named Ali Afrashteh chief technology officer. Afrashteh is a Clearwire veteran who also logged time with Sprint and Nextel, among other wireless companies, FirstNet said. Afrashteh will “manage FirstNet’s planning and deployment of technology programs and initiatives and provide expertise on strategic wireless technology and network operational planning,” FirstNet said in a news release.

The U.S. Court of Appeals for the D.C. Circuit rejected a challenge by Alpine PCS to an FCC decision to re-auction two licenses the company had bought in a 1996 auction. The FCC took that step after Alpine failed to make timely payments. The D.C. Circuit decided the case without oral argument. The court said it had affirmed the FCC’s decision in 2010, but in January 2013 Alpine filed a breach-of-contract suit against the FCC in a trial court. “The court dismissed the suit for lack of subject matter jurisdiction,” the D.C. Circuit said in its order (http://bit.ly/1rEQ63N). “First, Alpine claims a forum selection clause within the contracts it signed with FCC is controlling because Congress provided a waiver of sovereign immunity in 47 U.S.C. § 309(j). Second, Alpine contends the district court erred in not deferring to FCC’s interpretation of its jurisdiction, as purportedly embodied in that contract clause, in accordance with City of Arlington v. FCC. ... Because each argument is clearly foreclosed by statute and precedent, we affirm the district court’s judgment."

The FirstNet board’s Finance Committee approved fiscal year 2014 guidelines for expenditures for the rest of the year. Under the guidelines, FirstNet management is allowed to spend up to $33 million on network development, $16.1 million on outreach and state consultation, $16.1 million “to further develop FirstNet’s operating infrastructure, including facilities and support and contract staff,” and $6.9 million on business strategy development, said a news release Friday. “Today we are funding the essential steps for the rest of this fiscal year to move forward on our program roadmap and business planning for building a nationwide, interoperable, public safety communications network,” said FirstNet Chairman Sam Ginn.

The need for a TV incentive auction shows a breakdown in FCC power to regulate the airwaves, Tom Hazlett, a former commission chief economist, suggests in a white paper released Friday (See related story). The FCC has under the Communications Act “full authority to allocate spectrum according to ‘public interest, convenience or necessity,'” he said. “It does not exercise such powers in fact. The agency vested with issuing and renewing (on a seven-year cycle for TV stations) all wireless licenses has revealed that it must -- to carry out its legal mandate to promote the public interest -- buy back FCC licenses from the private parties it has assigned them to (and would use its discretion to otherwise renew).” But Hazlett said in part the FCC is recognizing reality. “Compelling evidence supports the FCC in its judgment that TV Band spectrum is efficiently substituted from TV to mobile services, and the Commission’s belief that it would be hamstrung -- by litigation, congressional backlash, or both -- if it were to uproot existing broadcasting stations (i.e., deny license renewals) under its ‘public interest’ authority,” he said (http://bit.ly/1kdcLRI). “The crucial insight is that regulation, as judged by the regulators, is too unwieldy a tool as to remedy the errors made in previous regulatory choices, such that using market mechanisms -- reverse auctions, in this instance -- will lower the cost and speed the delivery of efficient substitutions.” Hazlett is a professor at Clemson University, on leave from George Mason University.

The American Petroleum Institute said it supports a recommendation by the National Public Safety Telecommunications Council that business/industrial coordinators should be authorized to coordinate 4.9 GHz band channels applied for by business/industrial users. API also said the FCC should not permit “by regular licensing” the operation of vehicular repeater units on the 173.2375, 173.2625, 173.2875, 173.3125, 173.3375 and 173.3625 MHz telemetry channels. “Mobile voice operation is incompatible with the telemetry equipment currently deployed in the band,” said an FCC filing (http://bit.ly/1ntV1F0) by API, which represents oil and natural gas companies.

The FCC Wireless Bureau sought comment on a petition by the Land Mobile Communications Council (LMCC) asking the agency to modify rules for the 800 MHz expansion bands (EB) and guard bands (GB). The group asked that 800 MHz incumbent licensees in a market be given a six-month period to apply for EB/GB frequencies before they are made available to applicants for new 800 MHz systems. “LMCC states that spectrum for incumbent 800 MHz systems in urban areas to expand is urgently needed but sparsely available,” the bureau said (http://bit.ly/1mLEw7f). “It argues that a limited opportunity for expansion of incumbent systems would serve the public interest because those licensees had to undergo the disruptive rebanding process without deriving any economic benefit, and use of EB/GB frequencies to expand existing systems’ capacity would promote spectral efficiency.” Comments are due May 27, replies June 11.

While sharing is the wave of the future, it might help if some government agency were responsible for all government spectrum, similar to how the General Services Administration manages real estate, said Blair Levin, manager of the FCC’s National Broadband Plan. “Based on what I experienced in government, I think GSA, or OMB [the Office of Management and Budget] for that matter, does a better job forcing a certain kind of efficiency within an agency, than the agency can do for itself,” Levin said Friday. “If the knowledge and incentives lie only in the silo, the prime imperative will be to protect the silo. If authority resides in a broader group, the incentives, and the use of the knowledge changes; I hope Congress explores that.” Levin also took on what he sees as a too-common mantra in Washington, that the government shouldn’t pick winners and losers. “This is also ironic as the city’s major industry, lobbying, is premised on the need to affect the picking of winners and losers,” he said at a Washington conference sponsored by Clemson and George Mason University. But Levin said policy does affect investment. “I subscribe to a different point of view, one offered me by a great investor,” he said. “He told me, ‘D.C. flatters itself to think it can pick; there are too many factors to guarantee one result or the other. But policy is like gravity; it does affect where capital flows.’ So my question is where does D.C. want money to flow in telecommunications where it is not flowing now? Do we think the market is underinvesting in wireless networks? Wired networks? Devices?” Levin, currently at the Aspen Institute, is also a former analyst and FCC chief of staff.

It’s “too early to tell” how Verizon will split its budget for the upcoming AWS-3 and broadcast incentive auctions, but its top priority is the AWS-3 auction, said Chief Financial Officer Fran Shammo Thursday during a conference call with investors. The AWS-3 auction is to occur at the end of 2014, with license attainment during Q1 2015. Once the AWS-3 auction is complete, “then we'll deal with the broadcast licenses after that within 2015,” Shammo said. Verizon is currently using its existing AWS spectrum to increase capacity for its 4G LTE network. Those AWS deployments have mainly been concentrated in major urban markets like New York, San Francisco and Chicago, but it plans to deploy AWS spectrum in smaller cities and rural markets throughout the rest of the year, Shammo said. “The network performance is delivering what we expect it to,” he said. Verizon ended the quarter with a net $3.95 billion profit on $30.8 billion in revenue, driven in part by its successful $130 billion buyout of Vodafone’s 45 percent of Verizon Wireless in February (CD Feb 24 p22). Verizon added a net 539,000 postpaid wireless customers during Q1, having added a net 634,000 subscribers on tablets, but lost a net 138,000 postpaid subscribers using cellphones. AT&T said Tuesday it added a net 625,000 postpaid mobile subscribers during the quarter. Verizon’s net loss of cellphone subscribers -- the first quarter that’s happened since 2010 -- “is a shocking turnaround,” said MoffettNathanson analyst Craig Moffett in a blog post. “Verizon has topped AT&T for post-paid net additions every quarter since they got the iPhone. Not this time.” Verizon began offering the iPhone in 2011. AT&T’s response to competition from T-Mobile and its improved network performance has put Verizon “in a tough spot,” said New Street Research analyst Jonathan Chaplin in a note to investors. “Verizon is faced with either losing share or cutting price, at least until AWS deployment drives improved network performance for a large portion of the sub base."

Slower-than-expected LTE launch in China hit Qualcomm’s fiscal Q2 earnings, with many customers there opting for less expensive TD-SCDMA handsets over more advanced models, analysts said. Qualcomm Technology Licensing (QTL) unit sales were the most affected by the “delayed ramp” in China for LTE handsets, with licensing revenue of $2 billion falling short of analyst estimates for $2.2 billion, FBR & Co. analyst Christopher Rolland said in a research note. QTL-related device sales were $66.5 billion, below Rolland’s estimate for $69 billion due largely to Chinese customers buying TD-SCDMA phones on which Qualcomm doesn’t get a royalty. Qualcomm CDMA Technologies (QCT) business had mobile data modem (MDM) shipments of 188 million units, up from 173 million a year ago, but short of analyst forecasts for 192 million. Despite the sales shortfall, Qualcomm remains confident of strong LTE sales this year “albeit somewhat more backend loaded than our previous expectations,” Qualcomm CEO Steve Mollenkopf said. Qualcomm has more than 100 4G licensees, including 60 in China, he said. About 270 cellular operators have deployed LTE, with another 210 planning them, Mollenkopf said. In the second half, more than half of Qualcomm’s MDM shipments will be LTE-enabled, he said. China Mobile is forecasting having 500,000 LTE base stations in place by year-end, Mollenkopf said. Meanwhile, Mollenkopf, in an interview Thursday on CNBC, said Qualcomm is “pretty confident we haven’t done anything wrong” despite allegations of bribery in China. Qualcomm received a Wells notice from the SEC in March that recommended enforcement action related to the bribery allegations, Qualcomm said in an SEC filing. Qualcomm, which responded to the notice on April 4, is mid-way through the process, Mollenkopf said. The company first became aware of the investigation in 2012 and started its own inquiry, Qualcomm said. Qualcomm found that it provided employment, gifts and other benefits to “individuals” from Chinese-state owned companies and agencies, the company said. The total gift was less than $250,000, Qualcomm said. Qualcomm is cooperating with the SEC and U.S. Department of Justice, the company said. Meanwhile, the carrying value of Qualcomm’s Qualcomm MEMS Technology (QMT) division’s goodwill and property tied to a manufacturing facility in Taiwan was $133 million March 30, while the factory and equipment was $240 million, the company said. About $44 million in property, plant and equipment was being held for sale, Qualcomm said. Qualcomm took a $444 million impairment charge is fiscal Q1 related to the manufacturing complex, the company said. The factory was to produce iMOD bistable displays that used pixel elements composed of 10-100 micron micro electromechanical systems (MEMS). Qualcomm at one point projected spending $1 billion on the factory, which was scheduled to start production in fall 2012. Qualcomm shifted the focus of its MEMS display business to licensing in 2012. Qualcomm’s fiscal Q2 net income improved to $1.95 billion from $1.86 billion as revenue rose to $6.36 billion from $6.12 billion. The company’s QCT sales earnings before taxes (EBT) grew to $740 million from $681 million a year ago as revenue rose to $4.24 billion from $3.91 billion. QTL EBT grew to $1.83 billion from $1.8 billion as revenue improved to $2.07 billion from $2.05 billion.