WASHINGTON-Council Tree Communications Inc., an investment company that identifies telecom business opportunities for minorities and women, told the Federal Communications Commission late Thursday to reject the argument of the Cellular Telecommunications & Internet Association to open the bidding to all comers in the auction for the spectrum that bankrupt NextWave Telecom Inc. recently returned.
“The circumstances described by CTIA-the increased consumer demand for broadband services and the acute shortage of suitable wireless spectrum-are precisely why the FCC must maintain the current designated-entity rules for this auction. CTIA seems oblivious to the fact that smaller carriers are also struggling to satisfy their coverage and capacity needs and are experiencing the effects of increased consumer demand combined with an extremely limited ability to acquire additional spectrum. New entrants, for whom the DE program is designed, face an ever higher hurdle,” said Council Tree. “If this auction were to proceed without closed bidding, DE bidders would have minimal-if any-opportunity to acquire these licenses when competing against major carriers with deep pockets. As the commission has long recognized, bidding credits alone are insufficient in this environment.”
The FCC expects to begin auctioning the licenses NextWave returned as part of a settlement negotiated earlier this year Jan. 12-five years to the day that the FCC cancelled the licenses, the action that set it on a collision course with the Supreme Court. Ultimately, the court ruled in NextWave’s favor.
After the FCC canceled the licenses in 2000, it re-auctioned them in 2001 by creating some licenses that were available to all bidders and some licenses that were available only to designated entities-mostly small businesses. The spectrum NextWave bought in 1996 had been set aside for small businesses to allow them the opportunity to compete against the established telecommunications carriers.
Council Tree, based in Golden Colo., also asked the FCC to consider increasing the number of licenses that will be available only to DEs because NextWave returned fewer closed licenses than were available in the doomed 2001 re-auction.
“The FCC should re-designate sufficient open licenses as closed in order to increase the closed licenses to the same level as the 2001 re-auction-1.71 billion POPs-in order to maintain a comparable opportunity for DEs,” said Council Tree. “NextWave assigned to Cingular Wireless L.L.C. or retained for itself, closed instead of open licenses, and in doing so returned far fewer closed licenses to the commission to the detriment of the DE program.”
