FCC tightens rules on spectrum auction discounts
By Evan Blass 
posted Apr 26th 2006 1:50PM
posted Apr 26th 2006 1:50PM
Major wireless carriers planning to partner with smaller providers in order to get discounts on the upcoming wireless
spectrum landrush have just been delivered a major blow by the FCC, with the agency announcing a tighter set of rules
and penalties on a practice that had been popular in past auctions. According to the new rules, smaller carriers only
qualify for discounts if they lease less than 50% of their licensed spectrum to other operators, and those discounts
will be "further examined" for carriers sub-leasing as little as a quarter of their spectrum. Furthermore, if
a carrier goes ahead and leases too much spectrum within the first five years after they've obtained a license, they
must repay the entire amount of the discount plus interest. What does this all mean for the consumer? We're not
completely sure about all the specifics, but we wouldn't be at all surprised if the increased costs to the major
carriers happen to trickle down to our bills.
"smaller carriers only qualify for discounts if they lease than than 50%"
is this supposed to be "more than"???
seriously, proof read your posts
i suppose i should proofread my own posts, too...
Long live Alltel!
I think this is stemming from a WSJ article. There is a certain company tries to get individuals to purchase these spectrum frequencies. As individuals pretending to be small businesses they get the spectrums for a couple of million dollars rather than hundreds of millions. Large companies like Sprint, Verizon would pay large prices at the auction to be able to get the spectrums.
The company will let the individual "borrow" the money to purchase the spectrums, then after a short period, the individual will then sell the spectrums back to the company. The individuals will earn a couple hundreds of thousands of dollars, while the company will have the rights to hundred of millions of air wave spectrum.