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Proposed Budget Includes New Spectrum Fees

Article Comments  14  

Feb 26, 2009, 12:47 PM   by Rich Brome

The outline 2010 federal budget proposed today by the Obama administration includes significantly higher annual fees for holders of radio spectrum licenses, including cell phone companies. The fees would increase from $50 million/year now to up to $550 million/year over the course of the next decade. These fees are in addition the up-front license fees paid in auctions to reserve exclusive use of the spectrum. The current proposal is only an outline and a starting point; a more detailed budget proposal will be released in the spring. The goal of the increased fees is to help halve the budget deficit by 2013.

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Feb 26, 2009, 3:47 PM

This will send ripples threw the entire industry.

The profit margin is so low in the industry in the best of times. This will defiantly mean a huge change in the industry. Lets say a carrier like ATT has 60 million customers(I am not sure what the exact number is). Currently the average customer pays 83 cents for there share of the license fee. That will now jump to $9.17. That is a huge jump.
Its highly unlikely that a customer will be hit up for that amount at one time. If you divide your theoretical number by 12 months you get a figure about 77 cents. This will probably be rolled into something else, or at worst tacked into the FUSF.


Feb 26, 2009, 1:34 PM

More Expensive Services?

Would this then mean that they will charge the customers more to make up for the extra costs?
asLeepLessman said:
Would this then mean that they will charge the customers more to make up for the extra costs?

Depends on who "they" are. The wireless companies likely won't increase their monthly rates. You will...
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