The FCC's original idea of giving small businesses a discount in spectrum auctions to compete against the bigger players was a noble one when it was used in the PCS auctions during the 1990s. But it has never come about the way that the FCC and Congress had hoped: Minority-owned and small businesses would have equal footing in the wireless carrier industry. In fact, the very system designed to help these businesses turned into a huge advantage for major operators since they found ways to partner with smaller entities to receive the bidding credit and later buy out their partners. Now the FCC is considering ending the practice of giving bidding credits, but it might not come in time for the next auction of 90 MHz of Advanced Wireless Services spectrum, which is set for this summer. This auction is one of the largest undertaken by the FCC in nearly a decade and could bring in about $15 billion, according to the Congressional Budget Office.
Unfortunately, we have seen very few small businesses make a go of it in the wireless carrier industry. Metro PCS, which offers unlimited calling in some major metro areas, is one that comes to mind, but it is a miracle that the company is still here. Especially, after the company fought with the FCC for its licenses after filing for bankruptcy when it spent too much for C-block licenses in the 1990s. It still found the capital to do so. And NextWave finally was sold to Verizon Wireless. Now we're seeing that even the large regional players like Dobson are finding the need to consolidate in a wireless market dominated by nationwide operators who can command tremendous economies of scale to operate among the cut-throat competition. - Lynnette