Congress last week approved an $8.6 billion disaster relief bill. Relief, that is, for states throughout the country humbled, yet not humiliated, by floods, tornadoes, mud slides and other natural disasters, known as acts of God.
So far, for acts of man-those who run official Washington-no amount of money can repair damage being done these days to telecom policy.
In Congress, where wayward GOP and Clinton Democrats crow about a balanced budget plan that will leave social security bankrupt and other entitlement programs in chaos (not to mention failing to erase the deficit) by the time babies of baby boomers retire, telecom lawmakers are bellyaching about the budgeteers who’ve ordered them to raise $26.3 billion in spectrum auction receipts during the next five years.
“The auction process has been bastardized,” cried Rep. Michael Oxley (R-Ohio), an early proponent of auctions. He, like other GOP lawmakers who passionately embrace market forces, have all of a sudden lost faith in the market.
Wall Street, the biggest coward of all, has reacted by undervaluing bona fide paging and cellular firms, like AirTouch, because it can’t deal with the confusion wrought by PCS.
Congress bemoans the fact the market valued some Wireless Communications Service licenses at a buck. They’re frantically scrambling to legislate minimum bids and other fixes, making a miserable mess of things. Game theorists, meanwhile, are convulsing at the sight of government intervening in a process (auctions) inherently market-based.
Auctions aren’t broke. The problem is one of perception. Auctions, given the spectrum glut and new competition, are tapped out. It’s that simple. Once Congress and OMB relinquish their fiscal fantasy, the problem is solved.
At Justice, acting antitrust czar Joel Klein is finding his hands-off antitrust approach to telecom megamergers is making confirmation difficult, especially with anxiety about an AT&T-SBC merger.
The FCC, for its part, has gone down the road of no return with grants of rural cellular licenses to the Algreg alliance. NextWave and PCS 2000 are looking like choir boys about now.
The lame duck White House, facing the Paula Jones suit, congressional and Justice Department investigations into fundraising and Whitewater, continues to push a minimalist agenda with a lame GOP-led Congress.
President Clinton did show some of the old fire recently, though. He lashed out a Jerry’s Subs and Pizza for impersonating him on radio ads. The White House, in a telling sign, believed listeners really believed it was Bill hankering to slip out and evade Secret Service agents for a hoagie late at night.
