Seventeen years ago, as lead U.S. Senate sponsor of the 1996 Telecom Act, I helped introduce competition into the U.S. telecommunications market. Through hard work and compromise, we paved the way for a competitive marketplace that today provides the American consumer with more choices, lower prices and innovative services. In nearly two decades, competition among service providers has spurred job creation and investment, and in the process created multiple industries.
What I never imagined then and I find hard to believe now, is how a chorus has emerged calling for the U.S. government to subsidize some of these companies -- most particularly the foreign-based ones -- as they seek to purchase spectrum that the U.S. government is getting ready to auction.
Curiously, that's exactly what the U.S. Justice Department (DOJ) seems to be saying should happen when the federal government auctions airwaves with the proceeds to be used by public safety to carry out the recommendations of the 9/11 Commission.
If DOJ gets its way, America's two largest wireless companies, Verizon and AT&T, would be restricted from bidding for more spectrum against foreign-controlled competitors, Sprint (Japan) and T-Mobile (Germany). Essentially, the Justice Department is asking America's citizens and first responders to subsidize these Japanese- and German-owned companies. That's stupid and short-sighted
Call me old-fashioned, but I don't think it's government's role to have Americans subsidize foreign companies. And it sure shouldn't favor foreign-government-owned companies over American ones.
DOJ, however, proposes special help for interests in Germany and Japan, majority owners of T-Mobile and Sprint. Despite my strong opposition when I was in the Senate, T-Mobile sold itself to Deutsche Telekom and, indirectly, to the German government in 2000. I thought then and still believe now that foreign governments, even friendly ones, should not have a stake in vital U.S. industries. When economic interests clash, as they often do, I don't want to count on a foreign government to do right by America. The German government still owns 15 percent of DT, which owns most of T-Mobile. That's too much foreign government for me. A few weeks ago, Sprint was swallowed up by Softbank, a Japanese company that put $21.6 billion on the table in the deal. I welcome them to invest here and compete, but I don't know where their heart is. Softbank has deep pockets, it doesn't deserve special help from the U.S. government.
Senator Hollings of South Carolina served 38 years in the United States Senate, and for many years was Chairman of the Commerce, Space, Science & Transportation Committee. He is the author of "Making Government Work" (University of South Carolina Press, 2008). You can learn more about Hollings online at www.FritzHollings.com.