ObamaCare glitches loom over FCC airwave auction

 The botched launch of the ObamaCare website has heightened worries that technical problems could cripple the Federal Communications Commission's upcoming auction of airwave licenses. 

FCC Chairman Tom Wheeler announced last week that he will delay the auction from 2014 to mid-2015, in part to give the agency more time to test its technical systems. 

"It is important for the auction to be completed as soon as possible, but one lesson from the disastrous rollout of Healthcare.gov is that a short delay of this complicated effort may be justified," Sen. John Thune (R-S.D.) said during a Senate Commerce Committee hearing on Tuesday.

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Sen. Mark Pryor (D-Ark.) said it is important for the FCC to make the right policy decisions about the auction, but it also must focus on getting the technology to work. 

"Of course, we've learned in the last few weeks that software and hardware are important when it comes to these types of things," Pryor said. 

Gary Epstein, the head of the FCC's auction task force, tried to reassure lawmakers that the agency is focused on avoiding the kind of technical problems that prevented many people from buying health insurance through the federal website.

"Throughout our entire process, we will be researching, developing, testing, and retesting the operating systems and software necessary to conduct the auction," Epstein said.

"We will ensure that the auction operating systems and software meet the strictest performance requirements and work from the moment the first bid is placed until the final broadcast station is repacked." 

The FCC plans to buyback the broadcast licenses of some TV stations and then auction those licenses to cellphone service providers. The additional spectrum—the frequencies that carry all wireless signals—will help the cellphone carriers meet their customers' skyrocketing demand for streaming videos, downloading apps and browsing the Web on mobile devices. 

The auction is also expected to generate billions of dollars in government revenue to pay for a nationwide wireless network for first responders and for deficit reduction.

The most controversial decision that Chairman Wheeler will have to make in the coming months is whether to limit the ability of Verizon and AT&T, the two largest carriers, to bid in the auction.

Sprint and T-Mobile warn that the two industry giants could dominate the auction, accumulating enough spectrum to stifle competition in the industry.

Steven Barry, CEO of the Competitive Carriers Association, a lobbying group representing smaller carriers, testified that if the FCC doesn't cap AT&T and Verizon, it could eventually lead to industry consolidation as companies become unable to compete. 

Joan Marsh, a vice president for AT&T, argued that holding an open and unrestricted auction would generate the most money for the government and would put the spectrum to the best use. 

But she said if the FCC does consider caps, they should apply equally to all companies, regardless of how much spectrum the companies had going into the auction. 

Although Republicans have expressed skepticism of caps, Thune, the committee's ranking Republican, indicated that he supports them as long as they apply equally to all companies. 

"Instead of exploring auction rules to arbitrarily limit or benefit certain carriers, the FCC has the ability to consider setting a limit on the amount of spectrum any single bidder can win in the incentive auction," Thune said. 

"Such a limit, applying equally to every bidder, would at least allow all companies to have a fair shot at acquiring the spectrum they need while preventing any single entity from winning all the licenses."

Sen. Richard Blumenthal (D-Conn.) urged the FCC to impose auction limits to boost industry competition, saying it is "among the core, profound interests that this committee can help serve."

Sen. Cory Booker (D-N.J.) argued that the FCC should set aside a sizable amount of TV spectrum for unlicensed use, which powers Wi-Fi and other technologies.