Strengthening Small Businesses

These days, Chairman Wheeler circulated a offer to open new opportunities for little and growing businesses in the cellular marketplace. Although the proposal may audio technical – updating the Commission’s approach to small business participation in wireless auctions— the purpose is simple: To provide innovative, smaller companies the opportunity to build wireless businesses that can spur additional investment and bring more choices in order to consumers.

Think about the wireless industry today. Consumer demand can be exploding, data usage is growing significantly, and faster 4G networks allow even more data services. That type of growth should naturally lead to a lot more opportunity for more businesses to provide more consumers.

But current FCC rules stand in the manner. The current rules are a by-product of an earlier time— before data services became ubiquitous, before Congress instructed us to make more spectrum accessible to wireless networks, and, equally essential, before consolidation in the wireless business accelerated.

When the rules were first written in the 90s, we believed that bidding credits for spectrum auctions should be used only to acquire licenses by businesses that would engage exclusively in creating their own networks to provide retail or wholesale services – often referred to as “facilities based” service. That made sense when the wireless industry was in its infancy.

But nowadays the standard for economic opportunity need to take a broader, and longer, viewpoint. Considering the significant challenges new entrants face in building wireless networks, we can and should provide smaller businesses— including enterprises owned by women and minorities – a better on-ramp into the wireless business. Here’s one way: smaller sized companies may want to leverage business relationships with larger companies through a lot more flexible leasing arrangements to gain entry to capital and cash flow, not to mention functional experience. Allowing structured entry into the wireless business make sense, especially given the billions of dollars it would decide to try build a new national network from the beginning. With experience in operations and investment, smaller networks will have the prospect associated with progressing into more robust, facilities-based competition, which has been, and remains, a critical goal of the Commission.

Hence, the NPRM being circulated nowadays proposes to update our rules in a way that recognizes – and confronts – the challenges new entrants face in entering the wireless industry. Challenges like raising money to compete in an auction, getting a revenue stream to support business growth, or developing a business model based on marketplace needs rather than regulatory mandates. Maybe most importantly, the NPRM recognizes the challenge of entering into a marketplace in which more than 95 percent of existing customers are served by the top four providers.

Naturally , this policy will have to be policed. A few may try to take advantage of this flexibility to gain a discount for huge incumbents, which we will not enable. We will be on the lookout for such abuse plus enforce our rules vigorously.

Protection will come from the proposal’s focus on who is “calling the photos. ” The small business entrepreneur must exercise independent decision-making authority. If the small company is a stalking horse for another celebration, then the bidding credit will be dropped.

The proposal tackles another important issue – also from the trend towards consolidation in the wireless industry. We must make sure that the biggest companies are not able to limit broad participation in the spectrum auction. As promised in the Mobile Spectrum Holdings Report plus Order, we now seek comment on whether and how we should restrict the ability associated with wireless companies to combine their offers during an auction.

Our goal is to promote the particular participation of as many parties as you possibly can in the auction. If two from the largest companies are able to bid together combined entity in the auction, their own combined resources may have the effect associated with suppressing meaningful competition. Therefore , the item tentatively concludes that joint bidding arrangements between nationwide providers must not be allowed. It also asks questions regarding such arrangements between providers of different sizes.

The Chairman’s goal is to have common sense rules in place before the Incentive Auction, and hope all stakeholders will offer helpful suggestions so we can work together in order to empower small businesses and entrepreneurs in order to participate in the spectrum economy.

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