Ex-Congressman Boucher Warns of Potential FCC Auction Discrimination
April 9, 2012 4:02 PM
Verizon and AT&T could be excluded via the "spectrum screen" provision
On the eve of an ambitious spectrum auction, one former member of Congress is troubled. He fears that the government may mar the auction by blocking access to it without the approval of Congress.
"Winners and losers should not be chosen by the government. The FCC should keep a hands off policy," 14-term former Virginian Congressman Frederick Carlyle "Rick" Boucher" tells me in an interview about the
U.S. Federal Communications Commission
's recent actions. It was a point that he would return to several times in the interview.
I. Former Democratic Congressman Fearful of FCC Discrimination
For a former Democratic member of Congress, Rick Boucher's philosophy with respect to business is, surprisingly, closer in line with some of his more conservative Republican colleagues in Congress. In our interview he challenged many of the stands the Obama administration has taken in the telecommunications industry.
14-term former Congressman Rick Boucher spoke to us about spectrum. [Image Source: TPM]
"When it comes to the spectrum auction, the FCC might use one of its existing mechanisms -- the spectrum screen -- to sneak discrimination in the back door," he warns.
He's referring to the upcoming
auction of repurposed spectrum
left over from the
transition to digital TV
. A key talking point of the Obama administration has been
doubling the amount of spectrum
available to the market, including carriers like Verizon Wireless -- a joint venture between Verizon Communications Inc. (
) and Vodafone Group Plc. (
) -- or AT&T, Inc. (
Ostensibly, the spectrum auction is to play a key part in reaching that goal. Bundled in with the payroll tax cut (officially titled "
The Middle Class Tax Relief and Job Creation Act
"), it was a key success for the Obama administration and seen as a voluntary way to
eliminate waste of this precious resource
. Except that former Congressman Boucher fears that spectrum may not go to those top players that need it the most.
He states, "There probably are individuals at the FCC who think that large companies should be disqualified [from the auction]."
AT&T and Verizon are concerned about discimination in the FCC'S special spectrum (re)auction.
[Image Source: Oscar Hidalgo for The New York Times]
He praises Congress, saying that he thinks that they did a couple things right with the recent authorization. He states, "The FCC has been instructed by the Congress to develop a process for [carrying out] a spectrum auction...Congress correctly instructed the FCC not to disqualify from the incentive auction process any carriers based on their size or position in the mobile carrier market."
But then the issue returns to the fear of potential discrimination via the spectrum screen -- a provision design to
protect against "inappropriate concentrations"
of spectrum in the hands of a few holders in individual markets. While that provision may be legal to enforce in some cases, he suggests, he argues that overall, "We have antitrust laws that are designed to prevent undue concentration.
II. But What About the State of Competition in the Market? One Perspective...
Touché. The former Congressman states that the U.S. federal government has been reasonably "vigorous" in pursuing such an approach. I ask him whether he feels that the recent
U.S. Department of Justice
proposed AT&T acquisition
of Deutsche Telekom AG (
) subsidiary T-Mobile USA is an example of such enforcement, in his eyes.
He acknowledges that it indeed showed the administration was willing to strong pursue antitrust enforcement as a means to prevent buildup. However, he adds, "I happen to disagree with that particular decision."
He says, "the interests of the nation were not served" by blocking the acquisition, as it prevented a mutual fulfillment of spectrum and service needs, as
outlined by both companies
, he argues.
Rick Boucher suggests antitrust action is the legitimate path to preserving competition, but he argues that the T-Mobile USA acquisition was an example of bad litigation.
Spencer Platt / Getty Images
But the antitrust process is active and doesn't need additional federal supplements from the FCC, in his eyes. He warns of the upcoming spectrum crunch, stating, "We need spectrum urgently. The sooner it can be developed and placed on the market for carriers the better, as we have a spectrum crunch."
He points to government estimates that mobile data traffic will swell by a factor of five by 2015 -- just three years from now. He states, "Allowing larger bidders to buy spectrum does not foreclose smaller bidders by any means."
The mobile services market is very competitive, he argues. Several times in our conversation, he stated, "Most Americans have a choice of 5 wireless carriers."
Playing devil's advocate, I point out to him that while smaller carriers like Sprint Nextel Corp. (
), T-Mobile USA,
Communications, Inc. (
) are an option for most, they often enjoy key disadvantages, such lack of premium handset selection (Sprint only
recently acquired the coveted iPhone
and T-Mobile's selection is particularly lacking), which forces them into a role as budget carriers. The former Congressman acknowledges this to be true, but he argues that not everyone wants the most expensive option -- many Americans just want a smartphone that works and that these carriers have "plenty of
" to fulfill that need.
Besides, he argues, exclusive handsets like the iPhone have a tendency to trickle down to the smaller guys over time. On the prospects of a T-Mobile USA or MetroPCS iPhone, he states, "My guess is you'll see it migrate to other carriers as well... It makes sense for Apple."
I ask him about the
consolidation of the former "Baby Bells"
into what is today Verizon Wireless and AT&T. He says that at present he doesn't see this as an issue, reiterating the five carrier per region premise. He adds a major component of the AT&T breakup was to promote competition in the long distance market -- and he states that today rates are much more competitive (a fair point).
Consumers have not been harmed by AT&T and Verizon's slow merging process, former Congressman Boucher argues. [Image Source: The Colbert Report/Comedy Central; modifications: DailyTech]
As for the complaints raised by Post-Newsweek Stations Inc. -- a division of the Washington Post Comp. (
) -- and a handful of other small broadcasters who propose the auction
on the grounds of interference concerns
, the former Congressman feels that these concerns are unfounded. He acknowledges that TV broadcasters who stick around on the old channels used by analog will be forced to undergo repackaging, which may offer temporary inconvenience/service disruptions. But he says that the government is paying all costs of this spectrum shuffling, and once complete that there should be no serious interference issues.
The DC veteran suggests that fears of Verizon and AT&T hoarding spectrum are unfounded. After all, he points out, "The largest spectrum holder is actually Sprint if you consider what Sprint holds directly and what [Sprint-subsidiary] Clearwire [Corp. (
That's a fact that most people don't know.
III. Beware Vested Interests, But Consider Mr. Boucher's Points All the Same
For clarity's sake, Congressman Boucher does undeniably have a fair share of vested interests. In his unsuccessful bid for a 15th Congressional term in 2009-2010 he raised $29,500 USD from Verizon Communications, majority owner of Verizon Wireless. To be fair, that's only a tenth of a percent of his total raised funds $2.6M USD. In total he raised $210,050 USD from telecom firms -- or roughly 8 percent of his campaign costs. [
Further, he now heads
's government strategies process, as well as serving as an honorary chairman of the
Internet Innovations Alliance
(IIA) a DC advocacy group that represents AT&T among others (thus it's little surprise his dissatisfaction with the T-Mobile USA rejection). Sidley Austin is notably a long-time lead counsel for AT&T [
] and has represented the carrier in several merger battles.
The former Congressman is currently employed at AT&T's lead counsel, Sidney Austin LLP.
In short Mr. Boucher's ties with the telecommunications industry run deep, both in that they have historically helped finance his way into office, and today are paying his salary. That perspective is important, but it doesn't preclude the former Congressman from offering some valid commentary on the issue.
He does raise some interesting (and valid) points, even if he is unquestionably influenced by his own political and financial ties, ties that run deeper even than his party's general platform, which advocates stricter antitrust enforcement on the mobile carriers.
If Congressman Boucher were still an active politician, it would be easy to find fault, perhaps, in him taking the stands he is taking on these issues. Remember such ties run both ways -- while Obama's administration played opponent to AT&T in the T-Mobile bid, it supported a bid by
Sprint partner LightSquared
, which could have had
. LightSquared was a key donor to the Obama campaign in 2008, holding a fundraiser for him that reportedly raised millions -- a fact that LightSquared officials
the White House Chief of Staff in emails when they were pushing for approval.
But Mr. Boucher now is solidly a member of the private sector, albeit peripherally involved in the litigation efforts relating to the FCC and federal government.
In other words, think of his commentary about like you would think of
Shaq trying to sell you on a new Buick
from General Motors Corp. (
). -- it may be (in effect) hired commentary, but every company needs well-spoken, informed, passionate advocates capable of explaining their firm's viewpoint. Mr. Boucher certainly argues his side's perspective quite persuasively.
DailyTech would like to thank the Mr. Boucher for taking time out of his busy schedule to offer his views on various telecom issues with us.
"Can anyone tell me what MobileMe is supposed to do?... So why the f*** doesn't it do that?" -- Steve Jobs
Obama Admin. Aims to "Share" Combat Aircraft Training Spectrum
March 28, 2012, 3:51 PM
T-Mobile Claims Verizon's Spectrum Buy is "Unfair", Verizon Barks Back
March 6, 2012, 6:31 PM
Bribes and LTE: the Bizarre Case of LightSquared, Obama, and the USAF
January 24, 2012, 1:25 PM
AT&T Tucks Its Tail Between Its Legs, Abandons T-Mobile Acquisition
December 19, 2011, 4:50 PM
LightSquared Wireless Service Signals Interrupt 75 Percent of GPS Receivers
December 12, 2011, 1:00 PM
What is Flagship Sony’s XperiaX Smartphone?
October 25, 2016, 5:00 AM
The Galaxy C9 Pro Samsung Smartphone Has 6GB RAM
October 24, 2016, 4:29 AM
The Unlocked Moto Z Play Launches for $449.99 Today.
October 22, 2016, 5:00 AM
Nintendo Announced Next Game Machine to be Portable “handheld”.
October 21, 2016, 5:00 AM
Do you hate to do yard work?
October 20, 2016, 5:00 AM
Smart Technology Mood Collar To Understand Your Dog’s Emotions
October 17, 2016, 5:00 AM
Most Popular Articles
Car Insurance - The Hidden Discriminatory Practise
October 18, 2016, 5:00 AM
Tesla Announces Level 5 Autonomous Driving
October 19, 2016, 8:30 PM
Apple iOS Contains Secret One-handed Keyboard Code
October 22, 2016, 5:00 AM
Thieves Love iPhones – More than $13,000 Stolen from Apple Store
October 21, 2016, 7:13 AM
Do you hate to do yard work?
October 20, 2016, 5:00 AM
Latest Blog Posts
Researchers use CRISPR to Accelerate Search for HIV Cure
Oct 26, 2016, 5:00 AM
Medical Council of India Makes Generic Medicines Mandatory
Oct 25, 2016, 5:00 AM
MacBoo Pro 2016: Release date Oct. 27
Oct 24, 2016, 7:16 AM
Mac Users, Try this if Your Mac is Infected?
Oct 23, 2016, 7:00 AM
Tips to Prevent Smartphones From Overheating:
Oct 22, 2016, 5:00 AM
Nasa Flies Drones at Nevada Airport
Oct 21, 2016, 8:21 AM
T-Mobile Data Problems
Oct 20, 2016, 10:17 AM
Annoying Apple Watch Problems and How to Fix Them
Oct 20, 2016, 5:00 AM
Your Mail May Soon Be Delivered By Robot
Oct 19, 2016, 9:34 AM
2018 Jeep Wrangler Prototype Sells At Junkyard
Oct 18, 2016, 5:00 AM
Samsung Shines with Gold Edition Tablet
Oct 17, 2016, 9:24 AM
Tesla Hints Mysterious Product Debut for October 17th
Oct 16, 2016, 10:14 AM
Samsung Galaxy Note 7 Phones on US flights
Oct 15, 2016, 5:00 AM
Comcast Fined $2.3 Million For Unconfirmed Services Charged To Customers
Oct 14, 2016, 5:00 AM
“American singer / songwriter “Bob Dylan is awarded 2016 Nobel Prize in Literature.
Oct 13, 2016, 10:33 AM
Battery Defect in Medical Device
Oct 12, 2016, 5:00 AM
IBM Bolsters Social Services Sector With Technology Grants
Oct 11, 2016, 5:00 AM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information