Former Commissioners Push for Auction Authority, U.S. Reacts to China Micron Ban, Inmarsat Buy Approved

May 23, 2023 – Former commissioners of the Federal Communications Commission urged Congress to reinstate the agency’s spectrum auction authority in a letter Tuesday.

“As former leaders of the Federal Communications Commission (FCC), we have worked together, on a bipartisan basis, to lay the foundation for America’s global wireless leadership,” read the letter. “Although our policy priorities at times differed, we share an understanding that central to Americans’ wireless success is the FCC’s spectrum auction authority.”

The commission’s authority to auction spectrum licenses expired in March, for the first time in the agency’s history.

Since 1994, the FCC has been holding auctions for licenses and permissions to utilize the radiowaves for wireless connectivity. This authority, according to the letter, has been “connecting Americans from anywhere and on the go, and advancing U.S. enterprise, while driving the creation of more than 4 million jobs.”

The letter went on to stress “troubling consequences” in terms of national security and global economic leadership if Congress did not renew the authorization.

“Delay in renewing auction authority risks ceding a global competitive advantage to other countries, particularly China, which has been aggressively making spectrum available for 5G and investing in next-generation wireless technologies to capture global markets,” read the letter.

This is the most recent in a succession of appeals from the wireless industry and the FCC itself regarding the delay in reinstating the auction authority. Nine trade associations, including the Competitive Carriers Association, the Cellular Telecommunications and Internet Association, 5G Americas, and the Wireless Infrastructure Association, sent a letter to Congress regarding the issue last month.

Current FCC commissioners also sent their own letter last month urging Congress to reinstate the authority.

“Importantly, the United States cannot afford to wait,” read the FCC’s letter. “The global community will soon convene for another World Radiocommunication Conference (WRC) to determine the future of spectrum policy, and we must send a strong signal in advance of that meeting of our continued commitment to lead in coming generations of wireless technologies.”

Last week, a subcommittee of the Energy and Commerce committee pushed forward a bill that would extend the authority to June 30.

China’s Micron ban draws U.S. ire

China announced a ban on US leading memory chip manufacturer, Micron, in a statement released Sunday, marking another step in the tech competition between the two countries.

China’s cyberspace administration claimed in the statement that Micron presented “serious network security risks” and cautioned key Chinese information infrastructure operators against utilizing Micron processors in their projects, per the BBC. China initiated a security evaluation of Micron at the end of March, but the statement did not specify any particular risk factors.

In response to the Chinese regulator’s ban, the Commerce Department spokesperson expressed its firm opposition to “restrictions that have no basis in fact.”

“This action, along with recent raids and targeting of other American firms, is inconsistent with the PRC’s assertion that it is opening its markets and committed to a transparent regulatory framework,” continued the spokesperson.

At a conference last Monday, Micron Chief Financial Officer Mark Murphy said the company finds it “unclear as to what security concerns exist,” according to the Financial Times.

“We look forward to continuing to engage in a discussion with Chinese authorities,” he added.

More than 10 percent of Micron’s revenue came from mainland China, according to research firm Gavekal Dragonomics. Micron stocks fell approximately three percent on Monday following the Chinese ban announcement.

China’s action against Micron was the latest development in the context of increasing competition between China and the United States, particularly in the semiconductor industry. While the Biden administration advocates for restrictions on US investment in Chinese technology, the Chinese government is shifting its focus from US-based semiconductor firms to domestic chip manufacturers.

“The ultimate goal of retaliating against Micron is to urge certain American companies to restrain themselves, so we could further promote technology and trade cooperation, and avoid pursuing an isolated and self-reliant approach,” Teng Tai, an economist and the director of the Wanbo New Economic Research Institute in Beijing, posted on Weibo, a Chinese social media platform, per the New York Times.

The U.S. has itself banned Chinese firms from the country, including Huawei and ZTE.

FCC approves Viasat’s $7.3B acquisition of Inmarsat

The Federal Communications Commission approved Friday Viasat’s acquisition of Inmarsat, an estimated $7.3 billion transaction.

“After carefully reviewing the record in this proceeding, we find that the proposed transaction will not violate the Act or the Commission’s rules,” the FCC said in its decision.

“We further find that it is unlikely to have adverse competitive effects in the market segments in which the Applicants compete,” the decision added. “At the same time, we find that the proposed transaction will generate several public interest benefits, including giving the merged entity greater spectrum density and diversity and additional satellite capacity as well as enabling the merged entity to offer innovative services and improved service quality. Accordingly, we find that approval of this transaction will serve the public interest, convenience, and necessity.”

The FCC’s decision came soon after the Competition and Markets Authority of the United Kingdom granted unconditional approval of the merger.

“The combination will create a leading global communications innovator with enhanced scale and scope to affordably, securely and reliably connect the world,” read an Inmarsat statement from November 2021, when the deal was proposed.