AT&T Blasts Former FCC Head For Dissing Spectrum Bill

AT&T has come out swinging at opponents of proposed legislation that would set rules for spectrum auctions.

The GOP-sponsored bill -- the "Jumpstarting Opportunity with Broadband Spectrum Act of 2011" -- would allow television spectrum to be repurposed for mobile broadband use and auctioned off to the highest bidder.

However, politicians from both parties have criticized the legislation and, at a briefing on Capitol Hill earlier this week, former Federal Communications Commission Chairman Reed Hundt called it "the single worst telecom bill" he'd ever seen.

AT&T begs to differ. The spectrum in question could be worth billions of dollars, and AT&T, like other telco companies, what in on the action. The House Republican version of the legislation (the Senate is also working on a version) would not let the FCC impose any restrictions on who could buy the spectrum. So, AT&T could be bidding against some much smaller companies.

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And that is what opponents fear: telco giants will be able to outbid smaller competitors and dominate the airwaves. Hundt, who was appointed chairman by President Clinton, has said that the FCC should be able to use its discretion in determining what companies will be allowed to participate in the auction.

Jim Cicconi, AT&T senior executive vice president of external and legislative affairs responded sharply to Hundt's position: "Hundt’s tenure saw perhaps the biggest single fiasco of this sort, the PCS C Block auction. In that situation, the FCC used its discretion in a way that set aside valuable spectrum for ‘designated entities’, and excluded otherwise qualified companies from bidding.

Over half of the 493 licenses from that auction were later returned to the government for non-payment, and the licenses of the largest winner, NextWave, were tied up in bankruptcy litigation for years. In that case, the FCC’s use of its ‘discretion’ ended up costing the U.S. Treasury billions, and left vitally needed spectrum unused for years. "

Although proponents of the bill say that the auction could bring roughly $15 billion into the U.S. Treasury, the Congressional Budget Office reports that passage would reduce net direct spending by $6.5 billion over the 2012-2021 period. The projected savings reflect an estimated intake from FCC auctions of $24.5 billion (which count against direct spending) and an increase in direct spending of $18.0 billion. "Enacting this bill would not affect revenues," according to the CBO report.