Enhancing Competition and Opportunity in the Mobile Marketplace

Few areas of our economy hold more promise for aspiring entrepreneurs plus innovators than the wireless broadband industry. According to a Boston Consulting Team analysis, it already contributes $548 billion annually to U. T. GDP, and it is projected to account for 5 percent of our economy by 2020. BCG also reports that 90 percent of mobile consumers desire even faster data speeds, broader coverage and other improvements. The possibilities being created by the wireless trend are massive and will only carry on and grow.

Small businesses, including women- and minority-owned businesses plus rural service providers, should have the opportunity to reveal in this growth, but they have faced significant barriers to meaningful involvement in the industry. At our next Open Meeting, the Commission will vote on rules that would revamp our own outdated spectrum auction bidding procedures to help these entities better compete in today’s mobile marketplace. Simultaneously, our reforms will enhance the sincerity of the FCC’s auctions and ensure large corporations can’t game the system.

Making sure small businesses have genuine opportunities to provide spectrum-based services is certainly a goal of Congress and the Commission rate. In the 1990s, the Commission enacted rules creating bidding credits with regard to small businesses in spectrum auctions, fulfilling our Congressional mandate to help these entities compete more meaningfully at federal spectrum auctions.

It has never been more essential to wireless competition to help smaller sized businesses obtain additional investment and offer more choices to consumers. Nevertheless , the Commission’s competitive bidding rules have not been updated since 2006. Nine years ago, most mobile clients still relied on 2G connections, while today we’re leading the world in 4G and looking towards a 5G future. Considering the rapid modifications in our marketplace and the significant challenges new entrants face in building wi-fi networks, now is the time to update our own auction policies and provide smaller businesses— including carriers serving rural locations – a better on-ramp into the wi-fi industry.

The set up revised rules I circulated to the other Commissioners today would provide better flexibility for qualified small businesses so that they can better compete. For example , in today’s mature wireless industry, offering facilities-based wireless service is no longer a viable company plan for small enterprises, yet that is what our rules require in order for small businesses to qualify for bidding credit. We propose eliminating this constraint on business model innovation and freeing small businesses to make decisions that work great for them. The rules would also build a new rural business bidding credit score that will incentivize participation in upcoming auctions by rural service providers in the communities they serve.

In addition to expanding opportunities for smaller businesses, the modernized rules will increase visibility and efficiency to prevent potential video gaming or abuse, as well as protect the particular integrity of the Commission’s auction process. In particular, we establish the first-ever cap on the total value of bidding credits, minimizing an incentive for major corporations to try to take advantage of the program. We should also make sure that small businesses receiving credit are exercising independent decision-making expert. We will not allow small businesses to serve as a stalking horse another party.

The Commission rate will also consider another item aimed at promoting competition in the wireless market. As part of last year’s update to the Mobile Spectrum Holding rules, the particular Commission voted toimplement a market-based reserve of up to 30 megahertz associated with spectrum per market in the Motivation Auction for bidders that do not currently hold significant amounts of low-band range, provided that eligible bidders pay their particular fair share of auction expenses.

The Incentive Auction offers one of the last opportunities with regard to competitors to acquire significant quantities associated with low-band spectrum. With more than 70 % of low-band spectrum in the hands of just two providers, among the Commission’s priorities is to ensure that several providers have a meaningful opportunity to acquire these valuable airwaves, which is critical to competition among wireless companies. This is why the Commission voted to create aside this reserve a year ago.

While some parties have petitioned the Commission to increase the size of the particular reserve, the draft Order upon Reconsideration I am circulating today might maintain the reserve size at the current level. The draft Order concludes that the current reserve size associated with 30 megahertz balances the desire to make low-band spectrum available to parties along with limited holdings while facilitating aggressive bidding for all auction participants.

The rules adopted last year enable national carriers to bid with regard to reserve spectrum in markets by which they have limited low-band spectrum , nor restrict any reserve-eligible bidder through bidding on unreserved licenses. You will have significant spectrum made available in all marketplaces of the country to all bidders. Because of this, consumers will benefit directly from competition in all parts of the country.

We are going to also consider a Public Notice establishing the bidding procedures for the Motivation Auction, which is set to commence in the first quarter of 2016. The general public Notice reflects the views of several parties who provided comments in the Commission’s initial proposal in December 2014, resulting in a balanced solution that satisfies the Commission’s statutory obligations plus ensures the flow of the auction is transparent and straightforward.

It is another crucial advance in the process of designing and implementing an effective and efficient auction which will bring more capacity for wireless high speed services to consumers.

I look forward to working with my co-workers to update the Commission’s rules to increase competitive access to spectrum and supply consumers and businesses with more options of wireless providers, lower costs and higher quality services.

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