WASHINGTON-The Federal Communications Commission modified several of its spectrum rules hoping that wireless services can be made more readily available, but its decision to eliminate rural cellular cross-ownership rules was criticized by the panel’s two Democrats.
The FCC voted 3-2 to eliminate cellular cross-ownership rules in rural America, which means the commission will look at potential mergers on a case-by-case basis. Thus, the FCC could approve a merger between two carriers in the same market.
FCC Jonathan Adelstein wanted to keep cross-ownership prohibitions in place. “The majority has failed to provide any real compelling reason for eliminating the rule, instead basing the decision on a determination that the rule should be eliminated because we now have adequate resources and procedures in place to allow for case-by-case review, and somehow the need for flexibility outweighs any concerns about consolidation over cellular spectrum in markets where competitors would go from three to two or two to one,” Adelstein said. “The item completely fails to address some of the concerns raised by previous commissions that justified the rule in the first place, such as market conditions in rural areas and the fact that cellular carriers may still possess market power in these rural service areas. I cannot see how it would ever make sense in rural areas with two wireless providers to let them merge, leaving consumers with only one monopoly choice. But this approach could let this happen.”
FCC Chairman Michael Powell, who once served as the chief of staff of the anti-trust division of the Department of Justice, defended eliminating the cellular cross-ownership rule.
“By eliminating the absolute bar against rural cellular cross interests and transitioning to a case-by-case review of rural license transfers, the FCC can more effectively guard against anti-competitive transactions without prohibiting transactions that are in the public interest,” said Powell.
The commission also created a “private commons” option for licensees that allows some licensed devices to operate in another licensee’s spectrum as happens with unlicensed bands today.
“To facilitate further the use of advanced technologies, the FCC established a new regulatory option of `private commons’ as part of its leasing rules. This option will be available to licensees who wish to provide spectrum access to individual users or groups of users that may not fit squarely within the current options for spectrum leasing or within traditional end-user arrangements,” said the FCC. “This new option might be attractive to users of advanced devices that are capable of dynamic spectrum access but do not necessarily require use of a licensee’s network architecture. The private-commons option enables licensees to make licensed spectrum available for use by these advanced technologies in a manner similar to that by which unlicensed users gain access to unlicensed spectrum and to do so without the necessity of entering into individual spectrum-leasing arrangements.”
The elimination of the cellular cross-ownership rule and the creation of the “private-commons option” are part of a plan intended to increase wireless-service availability in rural America.
“In an increasingly mobile world, Americans demand seamless and reliable wireless service,” said Powell. “We are bolstering this objective by enhancing licensees’ financing opportunities, streamlining secondary-market transactions, and encouraging increased competition to advance the interests of rural America.”
But FCC Commissioner Michael Copps, who had asked the commission to examine wireless availability in rural America, was disappointed.
“Anyone who lives in rural America knows first hand that rural consumers have fewer choices of carriers, more holes in their coverage, and that there are still areas of our country that have no service at all,” said Copps. “I think this item steers us in the wrong direction. We can talk the talk about helping rural America all we want. But someday we’re going to have to walk the walk and get the job done. Today we trip.”
“The FCC expects that the new rules will stimulate innovation, investment and consumer choice by making it easier for those who want or need access to licensed spectrum to obtain it,” said the FCC.
As part of the expansion of secondary markets, the FCC will allow public-safety users to lease spectrum to other public-safety agencies or entities that support public safety. These entities must have a mission that is integral to public safety, said John Muleta, chief of the FCC’s Wireless Telecommunications Bureau. For example, a public-safety agency could lease some of its spectrum to a nuclear power plant so it would have interoperable communications with the plant’s security personnel, Muleta said.
The Cellular Telecommunications & Internet Association praised the FCC’s total package of secondary-market rules.
“Allowing wireless carriers the option to enter into secondary-market transactions with private parties increases carrier flexibility and reduces costs, resulting in lower prices and improved services for consumers,” said CTIA President Steve Largent.
