FCC auction policies deter deployment of wireless service in rura...

used to buttress group’s arguments. “It’s not the Telecom Act, but the implementation of the Act by the FCC,” NTCA Pres. Michael Brunner said. Telecom Act requires FCC to provide rural telcos with “meaningful opportunities” to participate in spectrum auctions and Commission isn’t complying with that mandate, he said. Survey was completed by 49% of NTCA’s members and 77% percent of respondents said they wouldn’t participate in any auctions in future because of high cost of spectrum, inability to compete with large carriers, inability to obtain license for limited geographic areas they wanted to cover. Only 1/3 of those that had tried partitioning were successful, survey said. Partitioning involves splitting off part of one company’s service area or splitting off portion of spectrum for another company’ use. Canfield said several Commission policies hurt rural companies: (1) It auctions large geographic blocks that include rural and urban areas. (2) Such auctions attract large companies with lot of money, so bidding credits do little to soften blow to small telcos. (3) “Lenient build-out rules” enable large carriers to hold onto spectrum in rural areas without using it in hope of seeing its value increase. FCC should consider smaller service areas, possible alternatives to auction process for rural telcos, seeking other incentives specifically for rural America, she said. One example of FCC’s lack of understanding of rural telephony, she said, is treatment of income earned by directors of rural co-ops in determining eligibility for bidding credits. Unlike regular companies, co-op directors have outside jobs, often as farmers. Because owning their own farm can cause directors’ income to be too high under FCC rules, co-ops are disqualified for credits, she said. Spectrum leasing may prove useful although, like partitioning, it involves dealing with larger companies in secondary markets, which adds uncertainty, NTCA officials said.