• The FCC and free-market fantasylands

    08.07.15 | Save Wireless Choice

    By Jeff Gelles, Philadelphia Inquirer

    Remember that old joke told about George W. Bush and other scions of the rich and famous who later find success on their own – that “he was born on third base and thinks he hit a triple”?  That’s what came to mind as I read of today’s decision favoring Verizon and AT&T by the Federal Communications Commission. The FCC serves as both an umpire and a manager in the telecommunications game, and it should know a Gentleman’s Triple when it sees one.

    As I wrote in an Inquirer column last month, the FCC essentially gave away high-value radio spectrum three decades ago to two licensees in each major market as the United States sought to seed a new cellular phone industry. One went to the incumbent Baby Bell, such as Verizon. Another was offered via a lottery, and most of the winners were rolled up into McCaw Cellular, which later become AT&T. It’s no disrespect to Craig McCaw, himself the son of a less successful broadcasting and cable entrepreneur, to say that the wireless business he sold for $12.6 billion in 1993 to AT&T got a huge head start in its industry – just like the Baby Bell systems that were eventually rolled up into Verizon.

    Today, the FCC set final rules for next year’s “wireless incentive auction,” a complicated procedure that should help to further competition among wireless carriiers. But in its effort to balance competing interests, it missed an opportunity: It rejected pleas from consumer advocates and smaller carriers such as T-Mobile, which urged a tweak to auction rules aimed at creating a more level playing field among the four national carriers that have survived – sometimes just barely – as the market has evolved.

    Read the entire column here courtesy of the Philadelphia Inquirer.