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Rockefeller spectrum bill scraps FCC effort, affects 4G competition: analysts

Senator Jay Rockefeller (D-WV.) planned bill on spectrum isn't just about building a public safety wireless data network for emergency first responder. Depending on how the cards fall, the bill could set the stage for corporate competition down the road, according to analysts.

To recap, the Commerce Committee chairman said he plans to introduce a bill that would hand over 10 megahertz of spectrum to public safety officials, adding to the 10 they already possess. Police, fire and other public safety groups have argued they need that additional spectrum to meet data demands of the future.

The bill essentially scraps a recommendation by the Federal Communications Commission to auction 10 megahertz of valuable spectrum to a commercial carrier, giving the proceeds of the spectrum to building the public safety network and the agreement that Congress and the carrier will continue to front building and operating costs of building a national network.

The move is a win for companies like AT&T and Verizon, according to Stifel Nicholaus analyst Rebecca Arbogast. She said those telecom giants have supported public safety officials' request for more spectrum to keep it out of the hands of competitors such as T-Mobile.

Verizon and AT&T "are in no immediate need of spectrum, (but) would prefer to keep the spectrum from competitors that could use it to close the gap, and were probably in no mood to enter a bidding war even if they were allowed to participate in the
auction," Arbogast said in a research note.

Motorola, the biggest supplier of handsets to emergency responders, also wins from the Rockefeller announcement. If the FCC's auction took place, which carried the condition of opening the handset market, "Motorola was at risk from facing additional competition."

The bill is a setback for the FCC, which has struggled to implement parts of its national broadband plan, with its ability to impose rules over broadband providers in question. Though it did advance its push for auctions of spectrum held by broadcasters that would give television and radio stations a cut of proceeds.

By Cecilia Kang  |  July 22, 2010; 11:06 AM ET
Categories:  Broadband , FCC  
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