HIGHTOWER: Stealing the Cell Phone Market
It is an Aesop fable that gives us the phrase, "The lion's share," which has come to mean the biggest part of something. However, the lion in the fable didn't merely take the biggest share of the stag that it and three other animals had hunted down -- it took all the prize.
Today, the giant telecommunications corporations are absolutely Aesopian in their grab for total control of all phone service. Take the cell phone business, in which a handful of giants have become dominant simply because they have the raw money power to out-bid smaller competitors for the airwave licenses needed to operate. So, to prevent AT&T, Cingular, Sprint, and a couple of other giants from grabbing all of the market, the Federal Communications Commission set aside 422 of these licenses in 195 markets across the country, allowing only small cell-phone companies to bid on them.
It was a good way to preserve some bit of competition and innovation in the industry -- but the anti-competitive giants got sneaky. They formed "partnerships" with small companies and provided them with the money to win the license. For example, Alaska Native Wireless is a small outfit that, amazingly, won 44 of these licenses, including paying $1.5 billion for a license to operate in New York City. Where does a little company like Alaska Native get billions of dollars? From its "partner" AT&T.
Indeed, of the 422 licenses that were supposed to go to small competitors, 95 percent went to front companies for AT&T, Sprint, Cingular and the other giants. As one genuine small firm put it, "We've been topped [in the bidding process] by sham entrepreneurs.
This is Jim Hightower saying ... Not only did the giants cheat in order to devour a market set aside for small competitors, but they also used their front companies to qualify for a small-business credit to pay for these licenses, costing us taxpayers $626 million. It's subsidization of monopolization.