Obama Proposes New Wireless Spectrum Fee ($500 million per carrier, per year)

[The Straight Story]

Obama Proposes New Wireless Spectrum Fee

Under President Obama's budget submitted to lawmakers, wireless carriers such as Verizon, AT&T and Sprint would be hit with huge fees for the right to hold a spectrum license. The fee per carrier would be $50 million this year and eventually rise to $500 million per carrier, per year within a decade. Users fear carriers will add the new fee to phone bills.

The Obama administration Feb. 26 proposed to tax wireless carriers as much as $550 million per year for the right to hold a spectrum license. The fee would be in addition to the billions carriers have already paid in spectrum auctions held by the FCC (Federal Communications Commission).

Under the budget outline provided by the Obama administration, the new fees would be used to help reduce the $1.7 trillion national deficit. The proposal before Congress would charge carriers like AT&T, Verizon and Sprint $50 million this year. The fee per carrier would jump to $200 million in 2010 and eventually rise to $550 million by 2019.

According to the OMB (Office of Management and Budget), the fees would generate $4.8 billion over the next 10 years.

http://www.eweek.com/c/a/Mobile-and-Wireless/Obama-Proposes-New-Wireless-Spectrum-Fee/

[Still Sensible]

1. This is for show

It is one of those things that looks like he's soaking the rich communications companies, but everybody knows that one way or another the consumer pays for it in the end. I don't have any problem making them pay a spectrum fee, even the original fifty million--if spread out to all their customers isn't a big deal in a year... but eventually getting to 10 times that amount, come on.

[David Dunham]

2. Bad idea. Drop it now.

[The Straight Story]

3. Indeed - the cost will be passed on and then some

Since paying the tax itself will incur administrative costs they will end up charging us more than the government is charging them.

[Terry in Austin]

4. Restoring the commons

It's a good idea, and good policy.

Radio spectrum belongs to the public. Private companies need to compensate the public when they use it for private gain.

Just like physical rights-of-way, cable and telecom companies pay for the use of some very valuable public real estate. We don't need to be giving it away.

We've just been brainwashed for too long by corporations who want to make a buck usurping the commons. Time to fix that.

[SoCalDem]

5. Aren't they getting it "free" now? (public airwaves & all that)

They sure charge us an arm & a leg NOW ..If they get it free, and make money from it, maybe they should be paying something..

Would a person expect to get a free building to use as his business site..and free merchandise too?, and then profit from selling it to other people? and keep all the profit?

[Terry in Austin]

6. Exactly right. nt

[The Straight Story]

7. They had to buy the sprectrum licenses (nt)

[SoCalDem]

8. bargain basement prices from the Bushies?

Since the spectrum is a "forever" thing, shouldn't they be forced to RENT.....like we all do ? :evilgrin:

[Terry in Austin]

9. We're having to re-learn how to regulate

After 30+ years of corporate looting of the commons, the techniques seem to have gotten a little rusty.

Let me dust off a little bit of classic, textbook policy concerning regulation (I happen to be in that biz).

It goes like this: a private utility gets franchised/licensed to use public rights-of-way (or spectrum) for the sake of "public convenience and necessity." In return, the utility pays for the privilege, pledges due diligence in its stewardship of public assets, and submits to regulation that allows the utility to earn a fair return at a fair price to the public. Among other things, this puts a cap on how much of the licensing expense it can pass on to the public.

And yes, it is like rent, so payment of fees is ongoing. BTW, license fees are often referred to as "taxes." Properly speaking, they are NOT taxes (more RW framing).

It's in the nature of a utility-like service that it operates best as a quasi-monopoly. That makes the most sense -- for one thing, there just isn't enough room for very many players. So the public makes a deal: a controlled monopoly. When there is a monopoly-like private business making use of public assets, that's reason for regulation. It's just sound governance -- best serving the public interest, and all that.

If I may add $0.02 worth of rant, the whole "competition" fantasy concerning telecom was just smoke from free-market ideologues gone wild. They had their day. Two or three players in a capital-intensive business do not make for a lively competitive market. We've seen how that works out. Pff.

Step by step, it looks like Obama's getting us back to the real world.

[SoCalDem]

11. yup.. when we moved here there were THREE cable tv vompanies

BUT they each only served a small portion of the city, and in some areas, there was NO service (why we had DirecTV -the old version)..and one by one they merged into 2, then one and it was something-I forget, and the Adelphia & now Time warner..ONE company ....]

no matter to us,. we have had Dish since it was first offered here:)

[jmowreader]

10. Good idea, but too expensive

A flat $500 million fee would put many of them out of business.

$10 to $20 per customer wouldn't be bad, though.