The new US government’s latest move to nibble into its massive $1.7 trillion deficit is to impose new spectrum license fees on cellcos. Outlined in the Obama administration’s 2009-2010 budget plan yesterday, the plan would add a new fee, starting at a total of $50 million in 2009 and leaping to $200 million in 2010.
There would then be a sliding scale of these fees, which would apply to existing as well as new spectrum holdings, over the next decade, to reach $550 million per year by 2020. This would generate an estimated $4.8 billion over 10 years, matching the amount the government expects to raise from new spectrum auctions ‘ having already sold off the AWS and most of the 700MHz airwaves, the US is running out of high value mobile licenses to auction.
None of the big four wireless operators has commented as yet, but they are sure to oppose the proposal bitterly, as they struggle to build out their networks in a declining consumer economy. Previous spectrum fee proposals have been defeated by the wireless industry, though a Democrat controlled Congress may be amenable to them – any such fees will require legislation.
Meanwhile, such issues will be at the front of the mind of the new-look FCC. The agency is determined to polish up its image and acting chairman Michael Copps this week outlined how a more open FCC would look, and said it should spend more time serving the public, rather than “refereeing disputes between powerful interests’. He said the FCC had strayed from its mandate over the years, and wants the agency to be more predictable, rather than making decisions like ‘thunderbolts from above’.
As expected, Obama has nominated Julius Genachowski to head up the FCC, which is seen as a strong sign of the new president’s open access and net neutrality credentials. Obama had promised, while on the campaign trail, that he would choose an FCC chief who shared his backing for the free internet. Genachowski, who still has to be confirmed by the Senate, anchored the drafting of Obama’s media policy agenda, which promotes fast and neutral internet connections for all, and increased consumer choice in telecoms and media.
Former presidential candidate John Kerry, another strong supporter of net neutrality, is to head the influential Senate Commerce subcommittee on communications and technology.
Genachowski, a Harvard Law School classmate of Obama, was previously chief counsel to former FCC chair Reed Hundt, who is himself still an outspoken campaigner for greater openness and competition in wireless and the man who first introduced spectrum auctions to the US. Genachowski is also co-founder of Rock Creek Ventures and LaunchBox Digital, which invest in digital media firms, a board member of various media companies such as Expedia, and has served as special adviser to General Atlantic, a global growth equity company.