Atop the headlines in the mobile space last week was President Obama’s proposal to levy a spectrum fee on carriers. This would be assessed as a licensing cost to broadcast on the spectrum which they already use. The fees would start at $50 million for 2009, hit $200 million in 2010, and end up at $500 million per carrier some time next decade. This, according to the president, is in an effort to reduce the national debt. However, carriers might just pass the buck to consumers, which would create even more problems. The problem with a spectrum fee is that carriers have already paid for the spectrum via auctions. How can the government justify an auction which nets them almost $20 billion, and then turn around and charge what amounts to a maintenance fee? It seems like this should be a one-or-the-other issue. I do like the idea of a licensing fee in general. For all the things communications companies pull on the consumer — forcing them to rent cable modems, cable boxes, and if you want to go back a few decades, telephones — this would seem like a form of poetic justice. Carriers would not own the airwaves. They would merely rent them without building up credit for the chance to own. There is no easy way around carriers passing the buck to consumers, which is why I think this plan will fail. Carriers will also obviously fight it, since it would mean perpetual fees for them. However, I do think that the bill could be a bit stronger if it allowed for a certain number of credits for companies which have purchased large swaths of spectrum at auction. Even then, it’s doubtful such legislation would pass through.
Would carriers pass proposed spectrum fee to consumers?
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