A cadre of wireless operators and trade associations sent a letter to Congress expressing concern that certain aspects of the “Middle Class Tax Relief and Jobs Creation Act of 2011” could limit the authority of the Federal Communications Commission to conduct spectrum auctions and in turn limit the competitiveness of the wireless industry.
The letter sites Section 4105 of the 369-page act that submitted in December, which according to the letter would “would substantially limit the FCC’s ability to promote competition and a competitive wireless marketplace for consumers throughout America. It would facilitate spectrum warehousing, inefficient use of scarce spectrum resources, and reduce spectrum auction revenues to the U.S. Treasury. Accordingly, we ask Congress to support fair spectrum auctions that promote competition in the mobile broadband marketplace by eliminating Section 4105.”
Section 4105 of the act states:
“Section 309(j) of the Communications Act of 1934 (47 U.S.C. 309(j)) is amended by adding at the end the following new paragraphs:
‘‘Certain conditions on auction participation prohibited. – Notwithstanding any other provision of law, the Commission may not prevent a person from participating in a system of competitive bidding under this subsection if such person – ‘‘(A) meets the technical, financial, and character qualifications required by sections 303(l)(1), 308(b), and 310 to hold a license; or ‘‘(B) could meet such qualifications prior to the grant of the license.
‘‘Certain licensing conditions prohibited. – In assigning licenses through a system of competitive bidding under this subsection, the Commission may not impose any condition on the licenses assigned through such system that – ‘‘(A) limits the ability of a licensee to manage the use of its network, including management of the use of applications, services, or devices on its network, or to prioritize the traffic on its network as it chooses; or ‘‘(B) requires a licensee to sell access to its network on a wholesale basis.”
This section would seem to take away FCC authority to install incentives for smaller carriers to participate in auctions, similar to its designated entity provision, as well as limits the FCC’s ability to require certain requirements on spectrum licenses like its open-access provision tied to some 700 MHz spectrum licenses.
Companies and organizations that have signed onto the letter include Atlantic Tele-Network, NorthwestCell, Bluegrass Cellular, C Spire Wireless, Sprint Nextel, Leap/Cricket, T-Mobile USA and the Rural Cellular Association.
“It concerns me greatly that major telecom policy changes are being contemplated in a non-related payroll tax measure,” noted RCA President and CEO Steve Berry. “Section 4105 creates enormous uncertainties and will impair every competitive carrier’s ability to build out their businesses and seek investors. … Congress should not re-write telecom policy on the back of a payroll tax measure, but rather should allow the FCC, the expert agency, to use its existing authority and flexibility to design auctions that maximize both utilization and value for taxpayers while ensuring competition both in the auction room and the marketplace.”
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