To the Editor:
During the next few weeks, the Federal Communications Commission will rule on requests to modify its decision to provide limited debt relief to C-block wireless personal communications services licensees that owe the U.S. government billions of dollars. The public interest would be well served if the FCC considers its decision in the overall context of promoting competition and does not accept the invitation to protect individual competitors. A fundamental component of our capitalist system is free-market competition, not government protectionism.
Auctions incorporate this long-standing concept into spectrum licensing. If the commission does not adhere to its original order, spectrum licensing will return to a system of government selection, instead of market-based selection. Further rule changes will not help small businesses; they will harm them by destroying the integrity of the auction process and the certainty of government regulation.
The FCC’s C-block decision is of monumental importance to the integrity of the auction process. If the rules are radically changed-by providing a discounted license price or deferring payments-the FCC will undermine the entire auction system. Not longer will the rules of an auction be viewed as the rules. Payments will be missed, waivers will be filed and the efficiency of auctions as a licensing process will be lost. Indeed, already licensees are trying to shift the focus away form clear rules that require payment to the government. These pleas set the course for government intervention that will become a pattern if the rules are changed further.
The claims of those seeking radical changes to the order-and more government relief from the debt they voluntarily assumed-fall well short of any basis for change for three primary reasons.
First, wireless competition is flourishing despite the individual bidder’s claims of harsh business realities. Indeed, just last week AT&T (Wireless Services Inc.) announced it will provide free airtime to its wireless customers for incoming calls. Many small business licenses have launched wireless PCS networks providing competition in major markets and innovative price plans. Consumers now can be heard raving about wireless options and optimal pricing plans instead of complaining about high airtime costs and poor service quality.
Consumers are not anxiously awaiting a government bailout of selected licensees to reap the benefits of competition.
Second, small businesses and entrepreneurs will lose only if the commission continues to change the auction rules. The harsh consequences of the impending financial demise of several C-block licensees is the loss of government financing in future spectrum auctions. The overly zealous bidding of certain C-block licensees did more to hurt small businesses and entrepreneurs than any alleged regulatory uncertainty.
Third, there is no legitimate basis to radically change the auction rules after the auction is over and the winners (and losers) have been declared. Many small companies lost their businesses during the auction. Companies that made deposits of $20 million to $80 million, which could have gone to the U.S. taxpayers, left the auction. More than 150 bidders left the auction with stranded investments and lost dreams. Their voices should not be muted by those that willingly assumed debt in the auction.
These small businesses accepted the consequences of a market-based system. Bidders that won licenses should not be shielded from these consequences or be permitted to cast the cost of their business failures on to U.S. taxpayers.
The FCC must promote competition, but not individual competitors. The even-handed approach requires continued adherence to the FCC’s initial decision.
Shelley Spencer
Member, Board of Managers
AirGate Wireless L.L.C.
Laytonsville, Md.
