WASHINGTON-Two African American groups have asked the Federal Communications Commission to block issuing broadband personal communications services licenses and called for an investigation of alleged collusion among major telecommunications firms that bid for licenses.
“The ongoing delays in the licensing of C block frequencies will leave prospective licensees in this block with no viable business option,” said the National Association for the Advancement of Colored People and the National Association of Black Owned Broadcasters.
In March, the FCC concluded the auction of 99 PCS licenses in blocks A and B and raised $7 billion for the U.S. treasury in the process. Now the agency is reviewing applications of winning bidders.
Two permits, each comprising 30 megahertz, were sold in each of 51 major trading areas (except in New York, Washington, D.C., and Los Angeles, where pioneer’s preference recipients won licenses). No minority preferences or incentives were offered in that auction, which was dominated by AT&T Corp., Sprint Corp., the Baby Bells and large cable TV operators.
The Democratic-controlled Congress in 1993, wishing to increase ownership diversity in the telecommunications industry, said women, minorities, small businesses and rural telephone companies-collectively known as designated entities-should receive special treatment in wireless auctions.
The C block auction, geared to DEs, was to have been held this spring, but a legal challenge to race- and gender-based preferences in PCS rules that was settled out of court delayed the start to Aug. 2.
A Supreme Court ruling on affirmative action due this month could delay the auction further, and even eliminate special breaks for women and minorities altogether. Any legislation passed by the GOP-led Congress to curtail federal affirmative action programs might have a similar impact.
In the C block auction (also referred to as the entrepreneur block), a 30 megahertz license will be sold in 493 smaller territories called basic trading areas. The FCC also has reserved a 10 megahertz, F block for designated entity licensing in BTAs.
“The situation would
have been avoided if the commission had complied with its statutory obligation in all frequency blocks… rather than to relegate its compliance to a limited frequency `ghetto’ in the
C and F blocks.”
The NAACP and NABOB fear A and B block winners will receive licenses, build systems and offer next-generation pocket phone service long before DEs get started, if they do.
“The situation would have been avoided if the commission had complied with its statutory obligation in all frequency blocks-including the A and B blocks-rather than to relegate its compliance to a limited frequency `ghetto’ in the C and F blocks,” the organizations stated.
Anne Bingaman, chief of the Justice Department’s antitrust division, pledged early on to review the results of the PCS auction for any improper bidding activity. A Justice spokeswoman said a review is in progress, but declined to say when it will be completed.
An administration economist said despite the $7 billion take, the auction was not competitive in terms of number of bids during the 112 rounds.
Meanwhile, Pacific Telesis Group’s PCS spectrum applications purchased in Los Angeles ($494 million) and San Francisco ($202 million) are meeting resistance from two competitors.
Cox Enterprises Inc., a pioneer’s preference licensee in Los Angeles, and WirelessCo L.P., the Sprint-cable TV partnership that paid $2.1 billion for licenses in San Francisco and 28 other MTAs, asserted the FCC should take stronger steps to prevent potential cross subsidization between PacTel’s landline telephone operations and its PCS business.
Advanced MobileComm Technologies Inc. and Digital Spread Spectrum Technologies Inc. urged that PCS licenses in San Francisco and Boston not be granted until a federal court rules on their appeal of an FCC ruling rejecting pioneer’s preference requests in the two markets.
