Enhancing Competition and Opportunity in the Mobile Marketplace

[Commentary] The draft revised rules I circulated to the other Commissioners would provide greater flexibility for qualified small businesses so that they can better compete. For example, in today’s mature wireless industry, 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. We propose eliminating this constraint on business model innovation and freeing small businesses to make decisions that work best for them. The rules would also create a new rural business bidding credit that will incentivize participation in future auctions by rural service providers in the communities they serve. In addition to expanding opportunities for small businesses, the modernized rules will increase transparency and efficiency to prevent potential gaming or abuse, as well as protect the integrity of the Federal Communications Commission’s auction process. 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. We will not allow small businesses to serve as a stalking horse for another party.

The Commission will also consider another item aimed at promoting competition in the wireless industry. As part of 2014’s update to our Mobile Spectrum Holding rules, the Commission voted to implement a market-based reserve of up to 30 megahertz of spectrum per market in the Incentive Auction for bidders that do not currently hold significant amounts of low-band spectrum, provided that eligible bidders pay their fair share of auction costs. The Incentive Auction offers one of the last opportunities for competitors to acquire significant quantities of low-band spectrum. With more than 70 percent of low-band spectrum in the hands of just two providers, one of the Commission’s priorities is to ensure that multiple providers have a meaningful opportunity to acquire these valuable airwaves, which is critical to competition among wireless carriers. This is why the Commission voted to set aside this reserve a year ago.