Nov. 4 action: FCC to vote on VZW-Alltel, Sprint-Clearwire, TV white spaces and more: AWS-3 auction likely won’t be up for discussion

Election Day 2008 is shaping up as monumental for the wireless industry.
The Federal Communications Commission is poised to vote Nov. 4 on the Sprint Nextel Corp.-Clearwire Corp. and the Verizon Wireless-Alltel Communications L.L.C. tie-ups as well as on wireless operations in TV white spaces, according to an agency source. The commission also will likely consider approval of reforms to rural wireless subsidies and the multi-billion-dollar regime governing what telecom carriers pay each other to complete calls.
FCC Chairman Kevin Martin is expected to outline his proposed agenda for the Nov. 4 meeting at a 1 p.m EST news briefing today.
There was some indication Martin may have wanted to include on the agenda his free national wireless broadband plan – currently subject to intense debate in the advanced wireless service-3 (AWS-3) proceeding – but he apparently has been unable to get sufficient feedback from other commissioners on possible options for going forward.
The $28.1 billion Verizon Wireless-Alltel deal and, to a lesser extent, the Sprint Nextel-Clearwire transaction have become magnets for controversy through such issues as antitrust, voice and data roaming, broadband spectrum consolidation and open access. The Verizon Wireless-Alltel also still needs Department of Justice approval.
Regarding the two major wireless transactions, Martin would condition the Verizon Wireless-Alltel and Sprint Nextel-Clearwire deals on the merged entities adhering to a proposed enhanced 911 location accuracy standard – based on county-wide measurement – that major carriers and public-safety groups endorse.
Martin said he also supports Verizon Wireless having to divest a handful of markets in addition to the 85 markets the No. 2 wireless carrier agreed to sell after consultation with the Department of Justice. Verizon Wireless recently identified 15 more markets it would put up for sale as part of the Alltel acquisition.
As for rural wireless subsidies, the FCC will vote on whether to eliminate the identical support rule for the universal service fund (USF). Such an action would lower the amount of funds a rural wireless carrier could get as compared with a rural wireline carrier.
The TV white spaces vote centers on whether to open up that spectrum to wireless uses, which Google Inc. and others have been pushing for.
Martin also wants the agency to grant a nationwide collection of regional C Block open-access licenses purchased for more than $4.7 billion by Verizon Wireless at the 700 MHz auction earlier this year. Other licenses picked up for $6.6 billion by the other big 700 MHz auction winner – AT&T Mobility – remain pending at the FCC.
Finally, the FCC’s vote on inter-carrier compensation could essentially reform the payments carriers make to one another in an attempt to bring more parity and less complexity to the system. Wireless trade group CTIA argues that, in the current structure, the fees are weighted heavily in favor of wireline carriers. In 2003, CTIA estimated wireless carriers paid $3 billion to $4 billion in interconnection costs alone.
Thus, the changes sought at the Nov. 4 meeting by Martin, who likely will step down as chairman early next year when a new administration settles in, have immense financial, competitive and policy implications for the wireless industry.