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WASHINGTON, D.C. -- The Federal Communications Commission neglects rural wireless customers, says a group representing more than 500 small telecommunications companies nationwide. That's not a new stance for the National Telephone Cooperative Association, but now the group says it has the numbers to prove it.

The FCC's spectrum licensing policies favor large carriers that neglect rural customers, says Michael E. Brenner, chief executive of the association. For example, he says, the FCC licenses "much too broad" geographical areas so that companies are responsible for areas with urban and rural sections.

Large companies such as AT&T tend to focus on more lucrative, densely populated urban areas, while smaller telcos that want to serve rural areas are unable to gain access to the necessary spectrum, Brenner says. Half of rural telephone companies have fewer than 2,500 customers, Brenner says, and are "simply unable to compete with the likes of AT&T or Sprint."

After winning licenses, large companies don't want to sell rural portions of them because urban sprawl might make those areas valuable in the future.

Survey Shows Flaws

Hoping to prove these and other claims, the association recently sent surveys to its 583 member companies; about half responded. About 77 percent of those respondents said they will not participate in FCC spectrum auctions in the near future. Substantial percentages of those respondents gave the following reasons for nonparticipation: cost (72 percent); unable to compete with larger carriers (67 percent); and can't get a license for their geographic area (36 percent).

These results show that the FCC needs to make changes, Brenner says, because it is not meeting requirements outlined in the 1996 Telecom Act, which said the FCC must create "meaningful opportunities" for small companies to participate in the division of spectrum.

FCC Policies

A FCC representative declines to comment on the survey, saying she hasn't yet seen it. But she says the commission's policies on partitioning the spectrum, designating areas of it for small companies, and providing bidding credits at auctions do "provide small companies with opportunities to acquire spectrum."

"Before it adopts any policies, (the FCC) solicits public comment," the spokesperson adds. Also, public input is sought and gathered whenever the FCC updates or changes its policies, she notes. The association says the FCC's current policies are not good enough, and that the FCC is "creating obstacles rather than opportunities," says Jill Canfield, counsel for the National Telephone Cooperative Association.

The association will use its survey results to educate legislators and commissioners on the perceived need for FCC reform, she says.

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