Auction Timing Should Consider Carrier Capitalization — O’Rielly

April 29, 2015

By Don Bishop

Bishop

April 29, 2015 – FCC Comm. Michael O’Rielly said that FCC Chairman Tom Wheeler has revealed his desire to conduct the incentive auction in the first quarter of 2016. O’Rielly said he is comfortable with the timing if there are no legitimate reasons for delay in a keynote speech at the Wireless Infrastructure Show in Hollywood, Florida, yesterday. Carrier capitalization should be factored into the timing decision, he added.

“Is there a need for wireless carriers to recapitalize to raise the $41 billion or $44 billion to provide that funding to the government, if needed, and then to have money to bid in an auction?” he asked. O’Rielly said he raised the question of the need for carrier recapitalization at the NAB Show two weeks ago in a an AWS survey, which resulted in an increase of what the broadcasters “thought their stations were worth.”

The commissioner said he worries that broadcasters could be “pricing themselves out of the market and the wireless carriers may have a gulf where they don’t have enough capitalization, and the gulf would mean the FCC has a failed auction. It’s most important that we get that timing right.”

Referring to a statement made on a CNBC TV program, O’Rielly said there is an idea that next-generation devices might bypass cell towers and become a part of a mesh-style cellular network. Considering that he was speaking to an audience of tower owners, his choice of the example was attention-getting.

“This could result in a diminished reliance on cell towers, and may even make them a thing of the past,” he said to tower developers and investors who have a lot riding on a future that continues to see wireless carriers renting space for antennas on their towers.

The Commissioner, however, made plenty of references to the FCC’s commitment to making spectrum available for wireless and to the critical nature of wireless infrastructure.

“Without infrastructure, the latest innovations and offerings will not be available to meet the demands of American consumers. Without infrastructure, the U.S. does not maintain its position as the leader in wireless and Internet technologies. Without infrastructure, the economic growth of the wireless sector and its corresponding benefits to the U.S. economy comes to a halt,” he said.

The commissioner showed an awareness of some of the nuances of promoting new tower development, including working with Native Nations to increase the efficiency of historic preservation application and review procedures.

“I hear that improvements can be made to provide Native Nations the information they need to protect their historic sites while ensuring that the process allows for the prompt construction of facilities. Creating best practices or guidelines, including reasonable timeframes and fees, could help provide greater certainty and finality to this process. Both industry and Native Nations should have shared expectations as to how this process works,” he said.