FCC boss Wheeler: Shove off, big dogs – let the small telcos play

Wireless carriers may not be able to exploit subsidiary loophole

Federal Communications Commission (FCC) chief Tom Wheeler has proposed new rules for upcoming wireless spectrum auctions which will limit large telcos' ability to snap up space meant for small carriers.

By entering smaller subsidiaries into the small business spectrum auctions, larger carriers are able to bid for more of the available space. This was the tactic Dish used when it splashed $3bn on AWS-3 spectrum space.

"At our next Open Meeting, the Commission will vote on rules that would revamp our outdated spectrum auction bidding policies to help these entities better compete in today’s mobile marketplace," Wheeler wrote.

"At the same time, our reforms will enhance the integrity of the FCC’s auctions and ensure large corporations can’t game the system."

The FCC chairman said that the upcoming wireless spectrum auction, designed to create more frequencies for use by wireless broadband networks, would receive additional rules on eligibility should the FCC commissioners pass his recommendations at the July 16 open meeting.

"In particular, we establish the first-ever cap on the total value of bidding credits, minimizing an incentive for major corporations to try to take advantage of the program. We must also make sure that small businesses receiving credits are exercising independent decision-making authority," Wheeler said.

"We will not allow small businesses to serve as a stalking horse for another party."

Wheeler also said he wants to remove the provision requiring that small carriers who bid for spectrum space be facilities-based carriers who own and operate their own network equipment and buildings, rather than leasing those facilities from a larger telco.

"Offering facilities-based wireless service is no longer a viable business plan for small enterprises, yet that’s what our rules require in order for small businesses to qualify for bidding credits," he said.

"We propose eliminating this constraint on business model innovation and freeing small businesses to make decisions that work best for them."

The FCC hopes to hold the spectrum incentive auction in the first quarter of 2016. ®

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