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.