Dear Editor:
Small businesses are the foundation of our nation’s economic success; they create jobs, spur innovation and spark competition. The Federal Communications Commission is committed to fostering the entry of small businesses into the telecommunications industry. Thus, it was with amazement that I read a recent article in this publication, entitled “Small Business Concerns Rail Against FCC,” that characterized the FCC as “anti-small business.”
This article described a meeting that I recently had with Personal Technologies Services Inc., DigiVox Corp. and the National Paging and Personal Communications Association concerning their objections to the revised financial terms for the F-block licenses. I spent approximately one hour, as did eight of my staff members, listening to their concerns and asking follow-up questions. Having just heard their request, and not yet having received a petition, we could not respond “on the spot.” Since the petition was filed, we have been seriously considering their comments and talking with similarly situated parties to determine the most appropriate regulatory action. Our inability to commit immediately to delaying the auction should not be construed as anti-small business or a desire to keep small businesses from participating in our spectrum auctions.
Under the leadership of Chairman Reed Hundt, the FCC has taken great strides to facilitate the participation of small businesses in the telecommunications industry, particularly in the context of spectrum auctions. No other commission in recent history has undertaken similar efforts to help ensure small business entry into this industry. And these steps have met with great success.
One of Chairman Hundt’s first actions was to establish the FCC’s Office of Communications and Business Opportunities. The mission of OCBO is to promote opportunities for ownership and employment in the communications industry for small businesses. OCBO’s outreach efforts enable small businesses to participate in the rulemaking process by disseminating information about commission proceedings and publicizing the opportunity for comment through mass mailings.
The commission also has been extremely successful in fulfilling Congress’ mandate in the 1993 Budget Act that small businesses have meaningful opportunities to compete in spectrum auctions. If we were truly “anti-small business,” one would expect our licenses to be awarded to a handful of established companies. Our auction results, however, tell a different story. Small businesses were major winners in the regional narrowband PCS (personal communications services) auction (33 percent of all licenses), the 900 MHz auction (26 percent of all licenses) and the Multipoint Distribution System auction (77 percent of all licenses). In broadband PCS, the commission established one-third of the licensed spectrum for entrepreneurs and small businesses. In the recently completed C-block auction and re-auction, 90 small businesses won the 493 licenses.
In addition to measures that have resulted in small business license winners, the commission has developed policies to promote post-auction opportunities in the marketplace. For example, we recently eliminated the ban on transfers of entrepreneur’s block PCS licenses for the first three years of the license to provide entrepreneurs and small businesses the flexibility to sell their licenses to other entrepreneurs and small businesses. In a recent Notice of Proposed Rulemaking, we proposed to expand geographic partitioning and spectrum disaggregation, which we anticipate will create focused, niche opportunities for small businesses to purchase spectrum.
Furthermore, the commission is aggressively implementing Section 257 of the Telecommunications Act of 1996. This section is intended to promote elimination of market entry barriers for entrepreneurs and small businesses in provision and ownership of telecommunications services. Through a Notice of Inquiry, we are actively developing a full record on the types of barriers small businesses face in entering telecommunications markets.
I share Mr. Walker’s concerns regarding the continued participation of small businesses in PCS. However, we approach this issue from different perspectives. As a representative of small business, Mr. Walker was doing his job to argue for more favorable terms and additional time to arrange financing. The commission also must do its job as spectrum manager and guardian of the public interest. This job includes finding the proper balance between providing small business financial incentives and ensuring the conscientious management of a valuable public resource. We believe that the steps we have taken in adjusting the financial terms of the F-block will help ensure that winning small business bidders have adequate financial resources to compete, and provide significant financing at generous terms. No one benefits from awarding licenses to businesses without the resources to compete effectively. Nevertheless, we will review this issue with an open mind and seriously consider the petitions before us.
The FCC does not guarantee success in the marketplace for small businesses, only an opportunity to compete. The FCC constantly strives to create a more level playing field for small businesses. Mr. Walker should carefully review the record before characterizing the FCC as anything but one of the most pro-small business agencies in the government.
Michele C. Farquhar
FCC Chief of the Wireless Telecommunications Bureau
