Matt Stoller's heart is in the right place, but I think this attack on FCC Commissioner Adelstein is misplaced. This requires digging into the nitty-gritty of the 700 MHz spectrum auction, so I'll describe it after the jump for those interested.
As I described earlier, one of the big questions in the upcoming auction is how big the "pie slices" should be. The bigger the blocks are, the better for the big boys. That's because smaller companies and start-ups can't afford buying huge chunks of spectrum -- largely for the same reason you can't afford buying huge stretches of beachfront property. I'll spare you the details, but right now there is one truly massive block being considered by the FCC -- the 20 MHz "D" block, which is twice as large as the next largest block being auctioned. (There are other, more complicated proposals that would add 2 more MHz, making it a 22 MHz block.)
One of the proposals on the table is to split this D Block into 2 smaller blocks. However, a separate proposal is to keep the big 20/22 MHz block in place and to make it a national license. In other words, there would be a single national licensee for the entire swath of spectrum. (Alternatively, you could license 20 MHz of spectrum to different carriers in different regions -- think of an x/y axis for these two different values: (1) range of spectrum; (2) geographical license area). Accordingly, this is a double whammy -- it's a huge block coupled with national geographical scope (i.e., one company gets it all). We're talking very big bucks here.
Adelstein, to his credit, expressed skepticism of this proposal because he knows the big boys -- i.e., Verizon -- would "win" this spectrum in a fire sale because few others could bid. I read this as him favoring splitting the 20 MHz D Block, which would be good. That said, a group of Internet companies calling itself the 4G Coalition has (foolishly) come out in favor of this national 20/22 MHz proposal. Stoller block quotes from this article:
A group calling itself the Coalition for 4G America has been aggressively lobbying for a 22 megahertz block of spectrum with a national license to be auctioned off. The coalition includes the likes of Google Inc., Intel Corp., EBay Inc. unit Skype Inc., and satellite television companies EchoStar Communications Corp. and DirecTV Group Inc.
It argues that such a chunk of spectrum would be necessary in order for a bidder to launch a significant challenge to the dominant cable and phone company broadband providers.
Stoller then adds:
I don't want to knock Adelstein, who has generally been a friend, and imply bad faith when it's not warranted. I just don't really get his position and why he's reluctant to help create genuine competition for the wireless industry. There are hundreds of billions on the line for various tech companies, so it's pretty clear there will be some business interest in this chunk of spectrum.
My take is that the 4G Coalition is playing the role of useful idiot. There is no way that a bunch of Internet companies with no experience with spectrum is going to outbid Verizon for this national license. What the 4G Coalition is accomplishing, however, is helping to justify a set of pro-incumbent auction rules that will help Verizon gobble up more spectrum for cheap (relative to its value). That's why Chairman Martin -- a wholly owned subsidiary of Verizon -- has expressed support for this proposal under the guise of introducing a new national competitor.
Adelstein is the voice of reason here people.
[Again, same legal disclaimer as my earlier post.]