White House backs spectrum caps

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A top White House official urged the Federal Communications Commission on Thursday to consider limiting the ability of Verizon and AT&T to bid in an upcoming auction of airwave licenses.

Speaking at an event on Capitol Hill, Tom Power, a deputy chief technology officer, dismissed that there was ever a question about where the Obama administration stood on the issue.

He noted that the Justice Department's Antitrust Division submitted a letter to the FCC arguing that caps may be necessary to preserve competition in the wireless industry.

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"I had always thought that DOJ was the administration, and it turns out it is. I looked it up," Power said to laughter.

"So yes, we support DOJ's findings — they are our findings," he added.

Verizon, AT&T and Republican lawmakers argue that the FCC should hold an unrestricted auction that allows all carriers to fully participate. They argue that caps or limits on the largest carriers would suppress government revenue and unfairly favor the smaller carriers.

Sen. Chuck Schumer (D-N.Y.) also sent a letter to the FCC this week warning against auction limits. 

But citing DOJ's analysis, Power warned that the largest carriers may be willing to pay a premium for spectrum — the wireless frequencies that carry cellphone signals — in order to block their competitors and suppress competition. 

Weaker competition would lead to higher prices for consumers, he said.

Power questioned whether an unrestricted auction would actually maximize government revenue, and he argued that in any case, that is not the government's only goal.   

The FCC is an independent commission and is not bound to follow the direction of the White House or the Justice Department. FCC Chairman Tom Wheeler has said he hasn't made any decisions about the auction yet, but he has stressed the importance of preserving competition in the wireless industry. 

—Updated at 2:21 p.m.