FCC's O'Rielly Warns Against Airwave Auction Restrictions

The newest Republican FCC commissioner pushes for Verizon and AT&T access to airwaves.

FCC Chairman Tom Wheeler swears in Commissioner Michael O'Rielly (National Journal)

Michael O'Rielly, a Republican member of the Federal Communications Commission, warned his agency on Monday not to adopt "undue" restrictions in the upcoming auction of airwave licenses.

"I also feel strongly that the Commission must not implement rules designed to preordain auction results or place undue restrictions on licenses," O'Rielly said in his first major policy speech at the Hudson Institute, according to a copy of his prepared remarks.

"Such efforts have failed in the past. And now, more than ever, we cannot afford to diminish participation or revenues. Instead, the Commission must allow licenses to go to their highest valued use and ensure spectrum flexibility."

The FCC is preparing to buy back the broadcast licenses of some TV stations for auction to cellular carriers. The additional airwaves, known as spectrum, will help the cellular carriers meet their customers' skyrocketing demand for mobile data.

Sprint, T-Mobile, and many Democrats are urging the FCC to limit the ability of AT&T and Verizon to bid in the auction. They warn that if the FCC doesn't impose restrictions, the two largest players could buy up enough spectrum to cement their dominance of the industry and kill off competition.

But O'Rielly said that restrictions could reduce the value of the spectrum and suppress government revenue from the auction.

FCC Chairman Tom Wheeler has not declared where he stands on the issue, but he has hinted that he is open to auction restrictions, saying he wants to ensure that "multiple carriers have access to airwaves needed to operate their networks." O'Rielly is one of two Republicans on the five-member commission.

O'Rielly also emphasized that for the auction to succeed, the FCC must make the process as simple as possible to encourage participation by TV stations.

In his first major policy speech, the agency's newest Republican laid out his conservative views on a host of other issues before the commission.

He claimed the FCC has "abused" its power to regulate the Internet under the Telecommunications Act. The D.C. Circuit Court of Appeals struck down the FCC's net neutrality rules earlier this month. Although O'Rielly is a critic of the rules, he expressed dismay at the ruling because it largely left the FCC's authority over the Internet intact.

The rules required Internet providers to treat all Web traffic equally, but O'Rielly predicted that the demise of the regulations won't mean that providers will begin blocking or degrading access to websites.

"I don't see the marketplace dramatically changing going forward," he said. "I would be reluctant to impose new obligations in this space."

O'Rielly hinted that the agency should relax its media ownership restrictions, saying the rules should be updated to "reflect the realities of today's media marketplace." He argued that the FCC must be more mindful of the size of its Universal Service Fund, which pays for a variety of federal programs through fees on monthly phone bills. He said the agency should reform how it collects money for the fund, but suggested that he would not be open to imposing fees on broadband Internet service.

The FCC is preparing to move ahead with trials for transitioning phone lines to Internet-based networks. Many consumer advocates want to ensure that the agency maintains adequate regulation of the new networks, but O'Rielly said the FCC "must ensure that its policies and regulations do not impede this innovation so that providers are free to implement the latest technologies and services."

"We should take this opportunity to see how many regulations we can do without, such as arcane regulatory accounting and jurisdictional separations," he said.

O'Rielly irritated some Democratic senators at his confirmation hearing last year when he announced that he would "stand strong for freedom." Democrats worried the statement sounded like the rallying cry of a hard-core conservative.

He ended Monday's speech with an attempt to ease concerns about his partisanship.

"When I use the word freedom, I do not mean to imply that I hold a monopoly or trademark on this value. I have seen throughout my professional career that the robust exchange of ideas and bipartisan compromises can bring about the best policy results," he said.