Don't get between AT&T (NYS: T) and something it wants, especially if it's wireless spectrum. And there's a wireless-spectrum bill -- two of them, actually -- being considered on Capitol Hill. The House spectrum legislation is one in which AT&T is particularly interested, because it limits the Federal Communications Commission's ability to regulate the auctioning of some newly available spectrum.
Reed Hundt, the chairman of the FCC from 1993 to 1997, was on the Hill earlier this week and was not shy about giving his opinion of the House bill. He called it "the single worst telecom bill" he had ever seen. Hundt is concerned that if the FCC is unable to assert any control over the spectrum auction, then the wireless carriers with the deepest pockets will be able to buy up all of the spectrum being auctioned and kill the competition.
Of course, AT&T and Verizon (NYS: VZ) , the nation's two largest carriers by far, would most likely be the only two able to hold out for long in a high-stakes spectrum shootout. And AT&T is the one of those two most hurting for spectrum at the moment. So it didn't take long for AT&T to reply to Hundt's bad-mouthing of the House bill.
"Despite Reed Hundt's recollection, the FCC's track record on auctions is not an unbroken string of successes. In fact, Hundt's tenure saw perhaps the biggest single fiasco of this sort," wrote Jim Cicconi, AT&T's head of external and legislative affairs, in the AT&T Public Policy Blog. "Congress has every right to tell the FCC it should not be picking winners and losers in the wireless market, or using its 'discretion' to tilt the playing field."
The second-tier telecoms, such as Leap Wireless (NAS: LEAP) , MetroPCS (NYS: PCS) , United States Cellular, as well as the smaller national carriers, Sprint Nextel (NYS: S) and T-Mobile, probably have a different perspective on what makes a level playing field than does AT&T. Those companies also have a need for more spectrum -- the lifeblood of the wireless industry -- so with no consideration for their thinner wallets, they could effectively be shut out from any spectrum gains.
AT&T has been relentless in its battle to keep the FCC from controlling the proposed spectrum auctions. During last week's quarterly earnings conference call, AT&T CEO Randall Stephenson devoted a considerable part of his time talking about how the FCC is trying to unfairly affect the outcome of any auctions: "I think the [current FCC] chairman [Julius Genachowski] made a speech the week after the holidays where he said he needed the rules to be fluid. My interpretation is these rules are so fluid, you can drink them with a straw right now."
Given AT&T's recent history with the FCC, this subject will be coming up again, and any resolution of it will have a lasting effect on the wireless industry.
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At the time thisarticle was published Fool contributorDan Radovskyowns shares of AT&T. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.
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