CTIA: Open access will hurt small operators

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CTIA: Open access will hurt small operators
CTIA is pulling out all of the stops to argue against the FCC's probable decision to attach open-access conditions to 22 MHz of spectrum in the 700 MHz upper band. This time, it is arguing that this open-access requirement will hurt small and regional wireless carriers.

"The proposed open-access requirements trade the benefits of rural deployment by small and regional licensees, and their proven track record of providing service to their customers, for-at best-speculative gains of an open-access network," stated CTIA on behalf of 139 small and regional carriers and organizations.

CTIA argued that an open-access plan will force large and small bidders to seek licenses in the lower 700 MHz band, where the license areas are smaller to benefit small and regional operators. Although many smaller licenses may initially cost more, large carriers will likely choose to bid on the many smaller licenses rather than accept larger, encumbered licenses. The end result would be fewer small and regional license winners in the 700 MHz auction.

Metro PCS, which has said it plans to use some of the $1.3 billion in notes it recently offered via an IPO for bidding on 700 MHz licenses, said in a separate FCC filing that "MetroPCS--and other small and mid-tier carriers who are attempting to provide substantial competition in the wireless industry--would be the main losers of any open-access requirement."

This is yet another factor that complicates the FCC's grand goal of creating a third broadband pipe in the U.S. The FCC must balance its interest in providing open-access while enabling small and regional operators to compete. And there are a lot of scenarios to run. In the end, it all depends on whether non-traditional operators such as Google actually move away from their saber rattling and decide to jump in the game as operators. Remember the AWS auction last year was supposed to attract a plethora of non-traditional operators, but it turned out that the usual players bought up the licenses. Being an operator is an expensive proposition for these companies whose core businesses aren't operating wireless networks. News Corp. has already cited the difficulty and expense of building out a wireless broadband network.

Meanwhile, the clock is ticking for the FCC to make some definite decisions. --Lynnette