If satisfying Wall Street's demands for Sprint and T-Mobile to use newly acquired spectrum only to serve revenue-rich urban and suburban broadband customers is the nation's primary goal, the FCC may be on the right track. On the other hand, if expanding mobile broadband deployment to rural Americans everywhere, from the mountains of western Virginia to the open ranges of the West, best serves the public interest, the FCC may want to choose a different path.
Unlike Sprint and T-Mobile, AT&T and Verizon have stressed that they will use additional spectrum to serve a population of nearly 300,000,000, bringing advanced mobile broadband services to less densely populated areas. In fact, these companies already serve large portions of rural America directly (not just through partners), offering the same competitive nationwide pricing and calling plans that they offer in the suburbs or cities.
Excluding certain companies from the auction in an attempt to engineer greater "competition" isn't going to work. Modern broadband networks require significant capital investment to build out these new services to difficult-to-reach populations. The companies that are most likely to make that capital investment are the ones who currently serve rural America and have announced their intention to expand rural access with newly acquired spectrum.
Availability of high-speed mobile broadband depends on service providers that agree to actually deploy cell towers there -- something both Sprint and T-Mobile have failed to commit to doing in the future. They seem perfectly content to focus their core efforts on areas where revenue per square mile will be highest. The "back 40" of Manhattan contains a lot more people, after all, than the back 40 of a ranch in New Mexico or Montana.
While these two foreign-owned entities are free to advance their business interests in Washington and Wall Street corridors, America's rural customers depend on the FCC to separate fact from fiction and help deliver broadband to every corner of the nation.
Non-existent investment commitments and theories on managed competition are no basis to rig an auction. If we seek a real "pop" in high-speed mobile broadband use in rural America, let's look at the population each company has agreed to serve. Our spectrum policies shouldn't exclude from the auction the prospective bidders who have actually announced plans to serve more of America's heartland.
Rick Boucher was a rural member of the US House for 28 years, representing 28 counties in the western part of Virginia. He chaired the Energy and Commerce Committee's Subcommittee on Communications, Technology and the Internet. Today he is the honorary chairman of the Internet Innovation Alliance (IIA) and heads the government strategies practice at the law firm Sidley Austin. He is a frequent speaker at conferences where he stresses the unique aspects of providing telecommunications services in rural America. Note: This guest article is not exclusive to TheStreet and was originally published on the IIA's website.
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts