CFA Commends the Results of the FCC’s Incentive Auction

Washington, D.C. – The following statement is attributed to Dr. Mark Cooper, Research Director of the Consumer Federation of America in response to today’s public notice from the Federal Communications Commission (FCC) announcing the results of the incentive auction.

“Today, the FCC completed an important step in its quest to release more spectrum for wireless broadband, releasing the results of both the reverse and forward auction.  This is critical for a wireless industry struggling to find new, innovative ways to secure the capacity we need to meet consumers’ growing demand, as our reliance on spectrum becomes more and more apparent. It is imperative, however, that American policymakers are aware that this spectrum also has the ability to create an all-powerful oligarchy if two companies continue to control the vast majority of our nation’s spectrum resources.

“Our extensive analysis of the wireless market shows that in the two decades after the passage of the Telecommunications Act of 1996, regulators and antitrust authorities allowed a merger wave to concentrate the sector and spectrum auctions allowed the big two (ATT and Verizon) to horde and waste spectrum (Overcharged and Underserved: How a Tight Oligopoly On Steroids Undermines Competition and Harms Consumers in Digital Communications Markets, Roosevelt Institute Working Paper, 2016). The resulting oligopoly on steroids imposes excess costs on wireless consumers of more than $30 billon per year. The only way to address this problem is to promote competition by blocking mergers and making more spectrum available to competitors.

“Through pro-competitive auction rules like spectrum aggregation limits and freeing up new unlicensed spectrum for innovative devices and services, the FCC has taken steps against the further consolidation of the wireless market and protected American consumers from a future of higher prices, less innovation and lower quality broadband services. While it is unfortunate that we had to bribe broadcasters to return our nation’s spectrum, we commend the FCC for their efforts to create and execute a spectrum auction that balances multiple objectives, creating of a more competitive wireless ecosystem.”

Contact: Mark Cooper, 301-384-2204

The Consumer Federation of America is an association of more than 250 non-profit consumer groups that, since 1968, has sought to advance the consumer interest through research, education, and advocacy.