HR 3630, the payroll tax extension, passed the House by a vote of 293-132 and the Senate by a vote of 60-36. The measure now goes to President Obama for his signature. While the bill lets AT&T and Verizon bid on broadcast television spectrum given up voluntarily, the FCC will have flexibility to add terms and condition to spectrum obtained by the two largest carriers.

It looks like Congress may be headed to signing off on a payroll tax extension. Unfortunately for broadband consumers, the package includes allowing the Federal Communications Commission the flexibility to impose on large carriers, such as AT&T and Verizon, conditions designed to ensure competition should carriers win bids for broadcast spectrum.

Allowing larger companies to bid is the appropriate approach this legislation should take. I’m still not comfortable with a regulatory agency creating conditions that ensure competition. If those conditions were to give Sprint and T-Mobile, two companies that have taken mismanagement to a new level, some additional advantage, you may as well keep more efficient and better managed carriers from bidding for spectrum.

The Wall Street Journal reported today that some lawmakers would like to use proceeds from spectrum auctions to pay for portions of the payroll tax extension package. They would like to see some of the bid money going to offsetting the renewal of unemployment benefits and upward adjustments Medicare payments to health care providers.

The irony of the proposal is that some of these same lawmakers wish to draft legislation that would keep large wireless carriers such as AT&T and Verizon from participating in volunteer incentive auctions where carriers could bid on spectrum licenses given up by broadcasters. Keeping out the large carriers poses two problems.

First, like I’ve blogged about before, keeping out large carriers reduces the chance that spectrum is being put to its best use. Carriers willing and able to pay premium cash for the licenses would be left out.

Second, if you leave out the big guys with the deeper pockets, it means less money being used to offset Medicare payments and jobless benefits.

The notion that Congress would use these monies to fund welfare programs is not sound. Congress, who should be well aware of the limited availability of spectrum, should instead let these funds stay with the Federal Communications Commission. These funds could be used to leverage incentives for deploying more broadband infrastructure, a much better approach to growing the economy than funding jobless benefits.

A number of small carriers have sent a letter to Congress requesting that the Federal Communications Commission be given flexibility to set restrictions on who may bid for spectrum during voluntary auctions. Among the wireless carriers signing the letter were Sprint, T-Mobile USA, and C-spire.

Didn’t take T-Mobile long to take the money and run.

The carriers argue that competition would be limited unless the Federal Communications Commission is granted flexibility to restrict access to the auction by America’s two largest carriers, AT&T and Verizon. AT&T’s vice-president for legislative affairs, Jim Cicconi, raised the concern that restrictions on who can access the auction cannot be described as competitive.

I agree with Mr. Cicconi viewpoint. Can you really call a process competitive when the agency responsible for access to spectrum blatantly wishes to establish bottlenecks for those companies willing and able to provide wireless services? Companies, large and small, should have access to the process. Let the highest bidder for a respective swath of spectrum receives it.

Sprint and these other carriers had years of opportunity to grow their networks; merge if they had to; in order to compete with larger carriers. By restricting the carriers with the larger economies of scale from participating will only mean unserved and underserved communities may be seeing increased prices, more dropped calls, or worse yet, no service.

Sprint acting more like a regional carrier

Sprint and AT&T are at it again. AT&T is calling out Sprint on the Kansas City-based carrier’s use of roaming agreements versus building out a network to provide consumers with real facility-based services. Sprint alleges this is good for consumers because the practice allows the company to provide its nationwide service..

Sprint calls this good for consumers? When a consumer purchases the service of a national carrier, the consumer wants the certainty of knowing that her service is being provided point to point by the network of the wireless carrier to whom the consumer forks over its money. What Sprint is doing inefficiently pricing its services if that is the case.

Worse yet, this may also be indicative of Sprint’s continuous poor management; buying 30 million iPhones it apparently can’t build a network out to service the phones on. Hard to believe the FCC considers what Sprint is doing as optimal use of a scarce resource.

Is it really good for consumers and investors that a wireless carrier of Sprint’s size and stature is mismanaging itself into becoming a regional carrier?