FCC Chief Kevin Martin has defended the upcoming auction sale against charges that due to the credit crunch it won’t raise the hoped-for amount of money, and bidding on the D Block (with the first responder-network provisions) may not reach the reserve price. He also pointed out that the FCC is required by law to go ahead with the auction. As the Wall Street Journal reports, in a news conference Tuesday, Martin “acknowledged that turmoil in the credit markets might result in lower bids in the auction” and said that “if bidding on all of the airwaves reaches the minimum set by the FCC, revenues would be at least $10 billion.” The focus on the amount of money to be raised is regrettable, since the spectrum auction isn’t really about raising funds for the government but letting the market decide the most efficient way to allocate spectrum amongst various technologies, uses and companies. The existence of a reserve price sort of undermines that statement, but is now necessary since the government has already spent the money. A more serious charge is that the FCC tailored some of its bidding rules to favor Frontline, which Martin denies, of course.

SEE ALSO: 214 Cleared To Bid In US Spectrum Auction

Perhaps the biggest effect of the credit crunch is outlined in this Reuters article: “Stifel Nicolaus analyst Rebecca Arbogast said the credit crunch does not affect large carriers such as AT&T (NYSE: T) and Verizon (NYSE: VZ) and other big companies, which have other ways of raising money for the auction…But for some other bidders, she said, it raises an added hurdle. “It’s always hard. It becomes harder when there’s a credit crunch,” Arbogast told Reuters.” It effectively helps the big guys against the small guys.