The U.S. telecom regulator plans to make it easier for small companies to acquire mobile spectrum, while at the same time preventing the big guns from exploiting loopholes in the system.
Federal Communications Commission (FCC) chairman Tom Wheeler revealed in a blog post on Thursday that he has circulated a set of draft auction rules to his fellow commissioners that will be put to the vote at a meeting next month.
Small companies, including rural service p roviders, "have faced significant barriers to meaningful participation in the industry," Wheeler wrote.
"At our next open meeting, the Commission will vote on rules that would revamp our outdated spectrum auction bidding policies to help these entities better compete in today’s mobile marketplace," he said. "At the same time, our reforms will enhance the integrity of the FCC’s auctions and ensure large corporations can’t game the system."
Wheeler did not name names, but it is not much of a stretch to suggest that his remarks are targeted at the likes of Dish Network, which used three separate vehicles to secure $13.3 billion worth of AWS-3 spectrum at auction 97 in January. Two of its so-called designated entities – the ones that actually won the spectrum – qualified for a 25% discount reserved for small players. The U.S. government has since opened an investigation into its bidding tactics.
Spectrum is still a hot topic in the U.S., with the auction of 600-MHz frequencies due to take place early next year.
The FCC plans to set aside 30 MHz of the available spectrum for smaller players, but T-Mobile US and others are lobbying hard for 40 MHz. After a characteristic tirade from T-Mobile CEO John Legere, in which he accused AT&T and Verizon of trying to monopolise the auction, Verizon hit back, pointing out that with a parent company the size of Deutsche Telekom, T-Mobile can hardly consider itself a small player.
On Thursday Wheeler revealed that his new draft rules will maintain the reserve at 30 MHz, a move that "balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants."
The existing rules allow national operators to bid for reserve spectru m in areas in which they have limited low-band spectrum holdings, and do not restrict participants eligible for the reserve from bidding on unreserved spectrum, Wheeler said.
"There will be significant spectrum made available in all markets of the country to all bidders," he insisted. "As a result, consumers will benefit directly from competition in all parts of the country."
The new draft rules are designed to provide greater flexibility for small businesses to enable them to compete more effectively. Wheeler’s proposals include the removal of the requirement for small companies to operate facilities-based business models, and the introduction of a rural business bidding credit designed to incentivise participation in future auctions.
"In addition to expanding opportunities for small businesses, the modernised rules will increase transparency and efficiency to prevent potential gaming or abuse, as well as protect the integrity of the Commission’s auction process," Wheeler said. "We will not allow small businesses to serve as a stalking horse for another party."
