Grange issues comments on need for open spectrum auction

commtowerruralToo often, wireless service in rural America remains spotty, with weak coverage and some hard-to-reach areas receiving essentially no service at all. And yet wireless broadband is indispensible to farmers and to everyone in rural America, providing not only critical weather and crop information, but telemedicine, educational opportunities, and vital connections to public safety.

This month we joined a broad coalition of 25 other organizations, including groups representing farmers, rural America, equipment dealers, educators, bankers, and telecommunications organizations in a comment letter filed with the Federal Communications Commission urging the FCC “to adopt rules and policies that promote wireless competition in rural markets.” As the letter noted, “more must be done to encourage new and better service, increase consumer choice, and spur innovation.”

Fortunately, there is a great opportunity to expand coverage and service in rural America on the horizon: the upcoming incentive auctions for wireless spectrum, the first such auctions in almost a decade. In particular, the auction for the 600 megahertz bloc of spectrum presents a critical opportunity to jumpstart upgrades in service. This spectrum will not only make more airwaves available for the needs of rural America but, because of its unique characteristics, will also expand the number and types of devices available for use in rural America, leading to greater consumer choice and more functionality on the devices we use.

And this type of spectrum will enable upgrades to faster, more reliable networks in rural communities across the country. If we want the same quality of service and the same technologies that Americans in cities and suburbs already enjoy spread across rural America, then it all starts with spectrum.

In fact, the Grange, and others in the ag community, would like to see a race to build out rural America with new technologies and services. For this to happen, it’s important that the upcoming auction not be constrained by artificial limits on who can bid but be open to all bidders who are willing to participate. We wouldn’t conduct a cattle auction by artificially keeping some bidders out; it’s the same with communications. Having more bidders means the price realized for the spectrum will likely be higher. And if the price is higher, that means more spectrum will come to market, which will in turn improve service.

Indeed, this is the conclusion of a piece just published by scholar Anna-Maria Kovacs on the incentive auction and mobile broadband competition in rural America. She notes that thanks to nationwide pricing plans from larger competitors, “the benefits of competition are surely flowing to rural areas even where there are fewer competitors.” In contrast, providing low-band spectrum at below-market prices isn’t going to do anything to address the disparity in revenue potential and thus the deterrents to investment in rural America. So excluding the very carriers that have committed to provide greater service to more people in more places makes no sense from the perspective of rural America. Smaller carriers have had success in purchasing low-band spectrum in past auctions; while some carriers are exploiting this spectrum, some of it has also been sold to larger carriers in the secondary market when carriers could not meet the high costs to build out the spectrum. So Kovacs concludes that misguided attempts to put a hand on the scale and lower costs to favored competitors are “likely to backfire”:

By limiting the additional low-band spectrum that can be bought by those two national carriers who actually serve rural America in the hope that the other two national carriers will enter those markets, the FCC is more likely to harm than help rural consumers, who need all the bandwidth their serving carriers can supply. Those willing to serve will lack capacity to meet rural subscribers’ explosive demand for mobile broadband, while those who are given capacity have indicated no willingness to serve.

 That’s why this incentive auction is so important for rural America and our nation’s farmers and why we were pleased to sign this letter. Now, it’s up to the FCC to ensure that the auction will be a success, so we can see the results right here in rural America.