WAIT, I THOUGHT THE OBAMA ADMINISTRATION HATED BIG BUSINESS: Ending Welfare for Telecom Giants: The FCC’s spectrum auction brought in nearly $45 billion. Why were some big bidders using taxpayer dollars?
What is astonishing about the manipulation of the bidding process is how cavalier the parties are. The two Dish-related companies—Northstar Wireless and SNR Wireless—didn’t exist until a few months before the auction, and each reported to the FCC that it was a “very small business,” as neither had any gross revenues. Yet together the two companies magically managed to place bids more than seven times those of spectrum-hungry T-Mobile . They claim to be small so they can qualify for federal money to cover 25% of the cost of a bid that suggests they have incredibly deep pockets. . . .
Plays like these shut out genuine small entrepreneurs. The Wall Street Journal reported on Jan. 30 that Stephen Wilkus, who worked for 27 years as an engineer at Alcatel Lucent , quit his job a year ago to bid in the auction. He set up a partnership whose investors included a few family members with controlling interests in other companies. As a result, lawyers told him he wouldn’t qualify for small business credits. With some understatement, the article concludes that Mr. Wilkus was “irked to see entities related to [Dish co-founder and Board Chairman Charlie] Ergen, a billionaire, obtain that same credit.” We don’t blame him.
The FCC’s rules are a labyrinth that only a lawyer could love. Even if everything was done by the book, why are the FCC’s rules set up this way? Does it make sense to milk taxpayers to benefit corporate behemoths? Should the FCC allow companies that don’t need the help to claim billions of dollars in taxpayer-funded discounts? Is it fair to deny designated-entity benefits to entrepreneurs who do need help entering the wireless business? We’d say no on each point.
It’s as if the whole thing is designed to protect existing
companies donors from competition.