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Wireless carriers rally to preserve FCC power

Several wireless carriers--with AT&T and Verizon notably absent--are quibbling over a clause in the House's jobs bill that would strip the FCC of its ability to impose restrictions in future spectrum auctions.

An early evening view of the Capitol building in Washington, D.C. Daniel Terdiman/CNET

The wireless carriers may not agree on much, but enough of them rallied to support the Federal Communications Commission's power to hold spectrum auctions the way it sees fit.

Sprint Nextel, T-Mobile, C-Spire Wireless, Leap Wireless, NorthwestCell, Bluegrass Cellular, Atlantic Tele-Network, and the competitive carrier trade group RCA sent a joint letter to 20 senators and representatives calling for the removal of language the House's jobs bill that would strip away a small, but crucial, bit of power from the FCC.

Notably, AT&T and Verizon didn't participate in the letter. AT&T CEO Randall Stephenson has already publicly said he looked forward to intervention by Congress to speed the parceling out of spectrum.

At stake is the FCC's ability to impose conditions on any spectrum it decides to sell off in future auctions. Specifically, one clause in the act would take away the FCC's power to force any purchaser of that spectrum to provide it to competitors on a wholesale basis and honor the rules of Net neutrality.

Section 4105: Prevents the FCC from excluding bidders from participating in spectrum auctions for reasons other than citizenship, character, financial, and technical qualifications. Also prevents the FCC from using its licensing authority to impose net neutrality or mandatory wholesaling on licensees. This does not, however, alter the FCC's rulemaking authority in those areas.

The smaller carriers argue that the larger companies are more financially capable of acquiring the spectrum and shutting out the competition. In the last auction, for example, AT&T and Verizon Wireless were among the big winners. Without conditions that mandate wholesale agreements for shared use, the larger companies could concentrate their power and hoard the spectrum, they said.

The wholesale mandate would allow smaller companies to sign fair roaming deals to allow for better coverage outside of their normal territory.

"The proposed provision would substantially limit the FCC's ability to promote competition and a competitive wireless marketplace for consumers throughout America. "It would facilitate spectrum warehousing, inefficient use of scarce spectrum resources, and reduce spectrum auction revenues to the U.S."

Sprint CEO Dan Hesse earlier today told CNET that he was confident the FCC would meet its targets in providing spectrum for the industry, and was in full support of the FCC having full authority to run future auctions.

AT&T, however, attempted to debunk the notion that mandatory wholesaling would spur investment. The company's federal regulatory head and chief privacy officer, Bob Quinn, said in a blog post today that Sprint itself illustrated that fair roaming rates actually decreases investment by wireless companies.

Sprint reported its fourth-quarter results today. During the quarterly conference call, Hesse noted that the company has saved $15 billion in capital expenditures between 2008 and 2011.

"From 2008 to 2011, our wireless capex investments were approximately one-third the spend of Verizon, one-third of AT&T's spend, and half the spend of T-Mobile USA," Hesse said on the call.

Quinn argued the lack of capital investment meant a lack of new jobs.

"I couldn't have made the case more clearly myself," Quinn responded. "Sprint wanted to stop investing in its own network and ride on the network investments other carriers have made."