Top executives from Sprint Nextel (NYSE:S), T-Mobile USA, Leap Wireless (NASDAQ:LEAP) and other small carriers urged key members of Congress not to take away the FCC's authority to set rules for incentive auctions of broadcast TV spectrum.
The carriers inserted themselves into a growing debate between the FCC on one side and AT&T (NYSE:T) and its supporters in Congress on the other, which want to prevent the FCC from setting strict auction rules. AT&T argues such stipulations would amount to the FCC picking winners and losers for the auction.
The smaller carriers, a group that also includes Atlantic Tele-Network, Bluegrass Cellular, C Spire Wireless, NorthwestCell and the Rural Cellular Association, wrote that a section of a House bill authorizing the auctions, as currently worded, would prohibit the FCC "from considering existing spectrum holdings in determining a carrier's participation in future spectrum auctions. The proposed provision 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."
At stake is an estimated $25 billion that could be generated by the auction of spectrum licenses currently held by the nation's local TV broadcasters. FCC Chairman Julius Genachowski said in January that Congress will make a decision on incentive auctions by March 1. Genachowski has urged Congress not to place restrictions on how the FCC sets up rules for the auction.
"Stripping the FCC of its auction design discretion would disserve the public interest by permitting unchecked participation by the two largest, best-funded wireless carriers in future spectrum auctions," the smaller carriers wrote. "That would discourage smaller competitors from participating in future auctions thereby reducing auction revenues and limiting wireless competition and innovation."
However, AT&T criticized the letter, arguing that auctions should be "open, not closed." In a statement, Jim Cicconi, AT&T's senior executive vice president of external and legislative affairs, said the group wants the FCC "to stack the deck in its favor. Congress is right to resist this notion. In fact, what this group proposes could not be called an auction with a straight face. These companies should be prepared to compete in a fair and open auction, and should stop seeking a rigged spectrum auction that would harm consumers and cost the Treasury billions."
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