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CEOs at Sprint Nextel, T-Mobile USA and other smaller carriers sent a letter to lawmakers on Wednesday, urging them to preserve the ability of the FCC to design airwaves auctions.

The letter (pdf) was sent to the 20-member panel tasked with crafting a year-long extension to payroll tax cuts for 160 million U.S. workers by the end of February.

Dear Senators and Representatives,

We write to call your attention to language currently contained in Title IV of H.R. 3630 (the “JOBS” Act) that could cause the U.S. wireless market to revert back to the innovation and competition starved market that existed before Congress granted the FCC spectrum auction authority in 1993. The JOBS Act contains provisions that could provide significant benefits to smaller carriers and consumers by putting additional, high-quality spectrum into the marketplace. However, Section 4105 of the Bill, as currently worded, would undercut those benefits by prohibiting the Federal Communications Commission from considering existing spectrum holdings in determining a carrier’s participation in future spectrum auctions.

Smaller carriers, including Atlantic Tele-Network, Bluegrass Cellular, C Spire Wireless, Cricket Communications, NorthwestCell and the Rural Cellular Association, hope to have an opportunity to bid on unused television frequencies. They hope the FCC will put restrictions on how much spectrum the largest carriers, such as AT&T and Verizon, can buy.

House Republicans introduced H.R. 3630 (pdf) which would prevent the FCC from restricting those who can bid in the auction. That bill, sponsored by Greg Walden (R-Ore.), would also eliminate any “free” use of the unused television spectrum for unlicensed use.

Today, a bi-partisan letter in support of unlicensed spectrum, was led by Representatives Darrell Issa (R-CA) and Anna Eshoo (D-CA) and signed by 40 of their colleagues (pdf). The letter was directed to House and Senate conferees working on the final provisions of the payroll extension package. It said:

We believe that spectrum reform will ensure that commercial users, public safety and federal users all have access to wireless capacity to meet our ever-growing wireless needs. However, in order to do that successfully, as it has in the past, the FCC must retain its ability to make appropriate allocation decisions and conduct auctions to maximize technological innovation and rural broadband deployment.

AT&T and Verizon accuse the FCC of stacking the deck, giving preference to smaller carriers.

According to Jim Cicconi in AT&T’s Public Policy Blog, “What this group proposes could not be called an auction with a straight face. These companies should be prepared to compete in a fair and open auction.”

The National Association of Broadcasters (NAB) has also asked a Federal court to shut down the FCC’s authorization of white space wireless devices.

Supporting FCC autonomy is Sen. John Kerry, D-Mass., who urged the Internet community to rally to push Congress to free up more unlicensed spectrum for Wi-Fi and other new wireless technologies.

“It’s going to take your voices and the voices of a whole bunch of folks similar to what happened a few weeks ago … to just rise up and make clear that that freedom, that the accessibility, capacity for innovation is vital to our future competitive position,” said Kerry, chairman of the Senate Commerce Communications Subcommittee.

The Senate Commerce Committee approved its own spectrum legislation last summer (S.911). The Wireless Innovation Alliance, a coalition of tech companies, public-interest groups and others, prefers Senate Commerce’s language on the issue, which would permit some unlicensed use of the White Spaces, as well as incentive auctions to enable carriers to expand their licensed spectrum holdings.

House Republicans may have the upper hand in the negotiations between the two bills. That’s because the House spectrum legislation is in the House payroll measure and the Senate Commerce bill is not, says the DailyDose.

In addition, the authors of the House spectrum bill, Energy and Commerce Chairman Fred Upton, R-Mich., and Communications and Technology Subcommittee Chairman Greg Walden, R-Ore., are House payroll-tax negotiators.

Walden’s bill would only provide $5 billion to $6.5 billion in funding for a dedicated nationwide LTE network for first responders. That’s half the money that S.911 provides.

Any Walden compromise might fork between being more sympathetic to the NAB (with more money for public safety) or for his constituents in rural Oregon (with unlicensed white spaces). I’m betting he’ll go with public safety. Cynics might consider it a gift to the NAB and large carriers.

Yochai Benkler, Professor of law at Harvard University, says “incentive auctions” threaten the future of wireless innovation by eliminating unlicensed spectrum.

FCC Chairman Julius Genachowski said the FCC’s unlicensed spectrum use generates about $30 billion worth of economic value every year (Genachowski remarks).

Free broadband enables local newspapers and magazines to thrive. It stimulates economies. Informs citizens.

A free market is a mass market…and white spaces are all about free. One AP could cover several blocks. They’re slow but cheap. White spaces are THE digital divide solution.

Taxpayers currently subsidize the Universal Service Fund to the tune of $8.7 billion.

Reality is stark. The JOBS bill will guarantee a multi-billion dollar subsidy for large carriers. Large carriers aim to use USF funds to subsidize their monopoly over spectrum below 1 GHz and kill off any “free” competition.

Who could blame them?

  • The carriers are not in business for the public welfare.
  • NAB’s group owners get their spectrum free – and aim to keep it that way.

The Universal Service Fund, a Big Tax, Big Government program, if there ever was one, seems to be propped up by Republicans for only one reason — SuperPacs.

Related Dailywireless articles include; Genachowski Lobbies for Unlicensed White Spaces, Universal Service Reform Passed, Microsoft Announced Narrow Channel Whitespace, FCC Authorizes White Space Service in Wilmington, White Space Legislation Goes Dark, White Space War, Bills to Kill Unlicensed White Space?, White Space Trial Completed, White Space Trialed, Huawei to Trial White Space TD-LTE, NTIA “Finds” 1.5 GHz of Federal Spectrum, UK Delays 4G Auction Ofcom: White Spaces by 2013, UK Gets Free Public WiFi, Europe’s Digital Divide Auction,

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