Small Bidders in License Auctions for Wireless Personal Communications Services

摘要

Since the mid-1990s, the Federal Communications Commission (FCC) has assigned licenses for providing wireless communications services through competitive auctions. In carrying out the auctions, the FCC has a statutory obligation to ensure that small businesses are able to participate in the provision of those services. The FCC complies with that obligation in part by offering auction preferences to small bidders on licenses that account for one-third of the radio spectrum allocated to broadband personal communications services (PCS), which include both mobile telephony and wireless data exchange. This Congressional Budget Office (CBO) paper, prepared at the request of the Senate Budget Committee, examines whether the FCC's small-bidder preferences imposed costs on PCS users and whether those preferences reduced federal revenues. First, because small firms may not establish and operate wireless networks as quickly or as successfully as larger firms, businesses and individuals may have less access to wireless communications and may pay more for them. In some cases, lengthy delays have occurred between the cancellation of a license for failure to satisfy financial and operational requirements and the reauction of that license. Second, partly because of their potentially less favorable commercial prospects, small bidders may not pay as much at auction for their licenses as larger bidders pay. As a result, by offering preferences at auction, the government may forgo auction receipts otherwise available to it. Consistent with CBO's mandate to provide objective, impartial analysis, this paper makes no recommendations.