To the Editor:
As an African-American and CEO of United Calling Network Inc., a licensed California public utility and a competitive access provider maintaining our own switches provided by Lucent Technologies Inc., I’ve learned a lot about fairness and integrity in our country. As one who deeply desires to offer affordable and highly competitive communications via C-block PCS to many disadvantaged and minority consumers to whom the “big boys” give short shrift, the question of fairness and integrity is all about jobs and keeping competition out.
FCC Commissioner Susan Ness has stated that “the FCC’s responsibilities are to … quickly issue licenses to successful applicants and maintain an equitable regulatory scheme. These responsibilities would not be met by changing our rules in a manner that imperils our impartiality.” Amen!
Ness is the only seated FCC commissioner who was in office when the A/B, and C-block auctions took place. One would hope that an appointed government official could be partial about her performance even if it were lacking. Being willing to admit culpability is the hallmark of integrity, a moral trait we can’t have enough of from our government.
Has Ms. Ness’ reign “maintained an equitable regulatory scheme?” A/B block auction winners received their PCS licenses within six weeks after petitions to deny were filed, even though the contested A/B licensees were embroiled in major constitutional issues. C-block winners waited six times as long to receive their contested licenses. Those nine months of license processing time for C-block licensees were a lifetime for the entrepreneurs and other small businesses like United Calling Network Inc. At the end of nine months of a very painful wait-and-see process, the commission made a total mockery of the major C-block licensees by issuing them temporary orders that were subject to all sorts of absurdities instead of issuing real clear-cut licenses that could be taken to the financial markets for further financing. This rendered the C-block licensees totally unfinancable. In fact, it is now 22 months since the C-block auction ended and, most unfortunately, a very substantial number of the C-block licenses are still pending clearance, after the temporary and conditional grant by the FCC, for no apparent reason except for the fact that the commission is still trying to keep a stranglehold on the C-block licenses and the indefinite suspension of their interest payments, the majority of the C-block licenses did not see even one clear day from regulatory morass to complete the next round of their financing. And this is after having raised and paid the very agency in charge of issuing those licenses more than $1 billion for their great work and never defaulting on even one payment to the federal government. What a travesty to the small businesses, the reseller community and the unsuspecting consumers!
What is the result? Our minority-owned business is at grave risk. And the incumbents who won in the A/B block are laughing all the way to the bank.
Lehman Brothers from Wall Street know what’s happening on Main Street. After AT&T’s recent briefing, Lehman’s wireless analyst wrote on Jan. 27, “Most of the smart oligopolists in AT&T’s markets will likely take the cue, and use the AT&T (pricing) umbrella to keep their prices from going any lower than they have to. Sprint PCS has recently indicated that it is in effect raising prices. It is a great sign to see the two biggest wireless companies in terms of pops in effect raising their prices. The much feared wireless price war seems to have abated.” Because of this, Lehman then goes on to “re-affirm our Buy rating on Omnipoint” another A/B block PCS winner. Omnipoint is a winner twice over-having already received a bailout of hundreds of millions of dollars on payment of its New York licenses for a pioneer’s preference technology that they promised to offer but remains vaporware in the eyes of consumers. That remains an issue of auction integrity worthy of another whole discussion!
Here in Southern California, since the Telcom Reform Act, we’ve seen SBC gobble up Pac Bell, both of whom were A/B block PCS winners. Pac Bell is selling PCS in my community at oligopolist rates of one dollar per minute ($20 for 20 anytime minutes). This is 20 times what most estimate an average wireline minute sells for! So much for the local competition that Susan Ness is charged to implement and promote. When one thinks of 20/20 vision, this gives a whole new meaning! The cellular incumbent in Los Angeles, owned by BellSouth and AT&T, will offer consumers a 10-cent wireless minute if they commit to pay at least $1,560 annually. How many average Americans can spend $1,560 a year to get 10-cent per minute airtime? Not many Hispanic, black and single-parent families who I meet every day can do more than dream of this. Ms. Ness, if you stand by what you say, “wireless competition exists and is growing,” then you need a reality check.
I want nothing more than the chance to compete against the wireless incumbents and put an end to this pricing rape. Yet I can’t because there has been zero integrity to the speed of the auction licensing process. I know that rich incumbents would be smarting and consumers would be winning if C-block contested licenses had been resolved in the same six weeks as the preferential treatment that incumbents with their fancy lobbyists got for the A/B licenses. I also know that United Calling Network Inc. would have hired by now hundreds of minority employees if Ms. Ness had not tinkered with the indefinite suspension of interest payments of the C-block restructured payment terms as proposed by the FCC Chairman Reed Hundt. So much for auction integrity!
Susan Ness is writing her legacy of presiding over one of the greatest fire sales in history. A re-auction of C-block licenses will penalize taxpayers twice over. Another two years or more will go by to give incumbents the opportunity to line their pockets with oligopoly profits. The lost revenue from a re-auction is estimated by the Congressional Budget Office to be up to $6 billion.
Is Ms. Ness ready to accept responsibility to Congress and the American public for costing us minority entrepreneurs jobs, taking billions of dollars away from taxpayers and consumers to line the pockets of incumbents, and failing to display integrity and impartiality in the speed of issuing licenses to established and new PCS license winners?
Ms. Ness does not understand that she is destroying honest people’s lives and livelihoods. We at United Calling Network Inc. and wireless resellers nationwide have no where to go if the congressionally mandated C-block experiment fails. If the FCC does not right the wrong it has done to the C-block licensees, then the government of the people has defrauded nearly 100 entrepreneurial businesses from $1 billion of on-time payments made to date, as well as years of investment in the network design and buildout, and the creation of new distribution channels, along with years of foregone opportunity cost and time value of money.
The U.S. Treasury would otherwise collect up to $6 billion more if Ms. Ness’ spectrum management policies weren’t thoroughly tainted by misfeasance. I, for one, will not stand by that. I promise Susan Ness that a congressional hearing will not only bring about a fair and final outcome, but also fully reveal the wrongful nature of conduct that has made a charade of congressional mandate to this point.
Let us hope the four new commissioners understand how Ms. Ness’ actions represent the fondest hopes of the incumbent and most importantly, let us hope real integrity is shown in the weeks ahead by the FCC.
Phillip Van Miller
chief executive officer
United Calling Network Inc.
