Tom Wheeler, head of the FCC (Federal Communications Commission), is working toward approval of new rules that would eliminate a loophole that larger telecommunications companies have been exploiting to keep wireless spectrum space out of the hands of smaller carriers. Like most other shady practices big businesses in all industries perpetrate, this one is routed through subsidiaries.
Curse You, Subsidiaries!
In the past, bigger carriers have entered their smaller subsidiaries into the FCC’s small business spectrum auctions, where they bought up space, essentially, for the parent company. Dish Network recently used this scheme to buy roughly $3 billion of AWS-3 spectrum space.
Wheeler is ready to bring down the mighty bureaucratic hammer. “At our next Open Meeting,” he said, “the Commission will vote on rules that would revamp our outdated spectrum auction bidding policies to help these entities better compete in today’s marketplace.
“At the same time,” Wheeler added, “our reforms will enhance the integrity of the FCC’s auctions and ensure large corporations can’t game the system.” A bold statement by Wheeler the Dealer, throwing out two words that are rarely heard in the same sentence: “FCC” and “integrity.”
Additional Addendums Added
Wheeler noted that further eligibility rules would be enacted should his recommendations be approved by FCC commissioners at the Open Meeting on July 16. Particularly important, Wheeler said, is establishing “the first-ever cap on the total value of bidding credits, minimizing an incentive for major corporations to try to take advantage of the program.”
“We must also make sure that small businesses [using those bidding credits at auctions] are exercising independent decision making authority,” said Wheeler. “We will not allow small businesses to serve as a stalking horse for another party.”
Wheeler also hopes to eliminate a provision that requires small carriers who bid on spectrum space to own and operate their own network equipment and buildings. Currently, those that lease such facilities from larger telecommunications corporations are excluded from bidding.
The FCC’s next spectrum incentive auction is scheduled for Q1 2016.