Rule Changes Sought to Encourage Wireless Investments
FCC rules prevent many financial players from investing in wireless companies in the U.S., Centennial Ventures, Columbia Capital, and M/C Venture Partners said in a filing at the FCC on the wireless innovation inquiry. The three private equity funds urged the FCC to relax its rules enforcing section 310(b)(4) of the Communications Act, which requires the commission to review investments by ventures with international ties.
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“Under existing Commission regulations and precedent, private equity funds, hedge funds, and widely held companies face significant barriers to investing in wireless ventures in the United States,” the firms said. “Even small amounts of foreign ownership or the use of off-shore investment entities, such as Bermuda or Cayman Islands corporations, trigger onerous and prolonged regulatory proceedings at the Commission even for indirect, passive investments above a certain level.” The current approval process for those with international investments “typically injects significant delay, uncertainty and expense in any investment transaction without any countervailing regulatory purpose,” the filing said.
In another filing, Media Access Project, Free Press, Consumers Union, the Consumer Federation of America, the New America Foundation, and Public Knowledge asked the FCC to “gather and analyze its own data” on wireless competition rather than rely on outside sources. “The Commission must broaden its framework, gathering and analyzing its own data from a variety of sources and market participants rather than relying exclusively upon unreliable and incomplete information supplied by third parties, in order to increase its understanding of crucial market segments beyond the scope of earlier CMRS reports,” the public interest groups said.
“The mobile wireless market is not effectively competitive today,” said Matt Wood, MAP associate director. “Collecting this data will help to ensure a more effective marketplace, as well as better access to the services, applications, and content that citizens want and need to participate fully in today’s broadband-dependent economy and society.”
The Rural Telecommunications Group, like CTIA, stressed the importance of spectrum for a robust wireless market (CD Oct 1 p7). But RTG said future auctions should be structured to offer more licenses in small, cellular-market-area chunks, which small carriers are more likely to buy. “Rural carriers cannot bring spectrum intensive innovative wireless services to rural America if they cannot access additional spectrum,” RTG said. “When licenses are auctioned for areas larger than CMAs, small and rural carriers and new entrants seeking to serve rural carriers are unable to compete in the auction marketplace with larger and nationwide carriers who seek to obtain such licenses for the purpose of serving the urban and other heavily populated areas within the license area.” The FCC should also ensure that bidding credits and other small business benefits don’t go to those with significant “material” relationships with larger carriers.
Sprint Nextel said “as a first order of business,” the FCC should assign 50 MHz of spectrum in the commission’s inventory. “Doing so will increase competition, promote investment, and encourage wireless deployment,” the carrier said. Sprint listed the 1.9 GHz H-block, 2 GHz J-block, 700 MHz D-block and 2.1 GHz AWS-3 block. “The Commission has conducted extensive rulemaking proceedings for each of these bands that have generated voluminous record evidence exhaustively addressing all aspects of band configuration, geographic license area, and interference protection,” Sprint said. “To be sure, these proceedings are not devoid of complexity or controversy. But time has not made the issues any less complex or controversial and they remain well within the Commission’s expertise and authority.”
T-Mobile tied the need for spectrum to other regulatory issues it has sought action on as obstacles to competition. On T-Mobile’s wish list for action are “discriminatory” roaming practices, “lax regulation” of special access services used for backhaul and “cumbersome” tower siting and pole attachment rules. “In contrast to the robust competition that exists today for retail mobile services, there is extensive evidence in pending Commission proceedings about market and regulatory problems,” T-Mobile said. “By taking narrowly-targeted actions to address these obstacles, the Commission will promote the ongoing development of wireless competition and innovation without engaging in broad-brush regulation of the wireless market itself.”