Carriers Say Changing Auction Rules a Long Shot
Wireless carriers acknowledged Fri. they seem to be making little progress on getting the FCC to change course on upcoming Auction 58, the major PCS auction slated for Jan. Carriers led by CTIA have been pushing the Commission to changes the rules of the auction to eliminate the set-aside for “designated entities” of more than 1/2 the 234 10-MHz licenses up for sale.
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“We haven’t given up yet,” said Tom Sugrue, T-Mobile vp, at an FCBA lunch featuring the carriers: “But to be candid with you we're not sort of making a lot of headway at the Commission as far as I can tell.” Sugrue said changing the auction rules remained important to T-Mobile. The Commission “hasn’t done that approach ever for any other service,” he said: “Every other band uses bidding credits instead of set asides instead of this one and for various reasons… it’s probably the least appropriate band at this point… to use such set-asides.”
Verizon Wireless Vp John Scott said the carrier was interested in buying spectrum during the Jan. auction and seeking clarity on the rules. “Our sense is that there’s a lot of ad hoc decision making at the Commission on this,” he said: “As a business, as we try to plan a systematic, rational expansion of our spectrum holdings… It’s very difficult to deal with an ad hoc approach from the regulators.”
“Spectrum issues are a priority for Sprint,” said Sprint Vp Luisa Lancetti: “Exclusive-use licensing of commercial mobile services ensures continued investment and intensive spectrum use and interference-free operations important to public. Unlicensed uses are better addressed in other bands and through secondary markets leasing mechanism.”
Sugrue and Scott also highlighted as a concern creeping state regulation of wireless carriers. State regulators, they said, are increasingly pushing the envelope on a provision in a 1993 amendment to the Communications Act that prohibits states from regulating wireless “entry” or “rates charged” but allows regulation of “other terms and conditions.” Scott cited the example of Cal. last week imposing regulations on wireless 411 directories. “The industry thought that [provision] was really intended to reach general state business regulation,” Sugrue said: “We didn’t think it would allow state utility commissions to come in and do what they are.”
On another issue, the carriers expressed concern that the Telecom Act be rewritten to reflect their concerns about the huge sums their customers are paying into the USF, which remains primarily a wireline program. Scott noted that Verizon Wireless customers pay more than $500 million a year. “What you've got here is a continuing tax on our customers to fund essentially rural telephone companies,” he said: “Whatever the merits of the universal service system at a time when the entire county was under AT&T… that no longer works in a competitive market-driven industry.”
The carrier officials said they expected major changes at the FCC after the Nov. elections both among commissioners and top staff. “No matter who wins there’s going to be changes,” Lancetti said. “Whatever happens there’s bound to be a slowdown,” said AT&T Wireless Vp Doug Brandon.
The carriers expressed regrets that in the end more wireless carriers couldn’t sign onto the Intercarrier Compensation Forum. Sprint was unique among wireless carriers in signing. “I thought it was a good effort -- if it was too ambitious because everything kept getting added to it, until it finally collapsed,” Sugrue said: “It was just a very difficult nut to crack.” - Howard Buskirk