ITIF Analyst: Time To End FCC DE Auction Bidding Credits for Small Business
FCC designated entity bidding credits in spectrum auctions should be scrapped, said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation, in a blog post emailed to us Wednesday. Brake said the DE program to foster small…
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business wireless entry hadn't worked well and he questioned whether it even made sense in today's mobile market, where size matters. He said the DE program was a good example of a dynamic described in "The Miasma of Regulation," a 1987 essay by Robert Reich (who later became U.S. labor secretary), which laid out "the cat-and-mouse game" in which regulators write rules and the regulated push the envelope, with the back-and-forth generating more complicated rules that confound American business. Brake said the recent controversy over Dish Network's relationship with two entities in the AWS-3 auction is just the latest controversy. The DE program may have made sense in the 1990s when it started, Brake said, but small businesses today face bigger challenges in launching a network and competing with entrenched national wireless carriers. "I have a hard time seeing a small business breaking into this market in a meaningful way, even with steeply discounted spectrum," which is "just a small fraction of the cost" of building a network, he said. "New entrants to the broadband access business will be the ones with radically disruptive technology, not a discount on one input. The DE program has a history of either being manipulated by large companies, or heaping largess on individual insiders who reap the upside with large profits and incomes."