[Congressional Record Volume 151, Number 45 (Friday, April 15, 2005)]
[Extensions of Remarks]
[Pages E662-E663]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          SMALL BUSINESS SPECTRUM OWNERSHIP OPPORTUNITIES ACT

                                 ______
                                 

                           HON. BOBBY L. RUSH

                              of illinois

                    in the house of representatives

                        Thursday, April 14, 2005

  Mr. RUSH. Mr. Speaker, I rise today to introduce the ``Small Business 
Spectrum Ownership Opportunities Act.'' This bill would level the 
playing field in the acquisition of spectrum for telecommunications 
services so that small businesses and economically disadvantaged 
business owners could enter the communications field. As you know, 
since the passage of the 1996 Telecommunications Act there has been an 
unprecedented growth on the Telecommunications sector, which has often 
been referred to as the telecommunications revolution. However, 
conspicuously absent from this revolution has been economically 
disadvantage business owners. They have in essence been left on the 
fringes of this telecommunications revolution. There are many factors 
attributed to this lack of participation but chief among them is lack 
of capital. Because entry into the telecommunication field is capital 
intensive, many deserving, innovative, and well qualified small 
business owners have been denied entry into this vital sector because 
they lack access to the needed capital to complete with large 
companies. The problem of small businesses access to capital in 
telecommunications is greatly amplified because potential lenders to 
small telecommunications businesses cannot secure an interest in 
spectrum licenses as a condition of a loan. Given that new spectrum is 
auctioned and requires cash, this defect in spectrum financing means 
that small business are disadvantaged in their opportunities when 
compared with companies that have broad access to capital.
  My bill would increase telecommunications ownership opportunities for 
small businesses, including small businesses owned or controlled by 
socially disadvantaged individuals, through Small Business 
Administration participation in a market-oriented restructuring of the 
credit aspects of Federal Communications Commission telecommunications 
spectrum auctions. The Act establishes two programs. THE 
TELECOMMUNICATIONS SPECTRUM INSTALLMENT LOAN PROGRAM which permits an 
entrepreneur to apply for a direct loan from the Small Business 
Administration in order to bid on a spectrum license in an auction of 
the Federal Communications Commission. In addition, the SBA 
Administrator may make loan guarantees (guarantees on private sector 
loans) only for telecommunications equipment and working capital 
necessary to carry out the terms of the license to be financed. The 
second program is the TELECOMMUNICATIONS ACCELERATED LENDER PROGRAM. In 
this program the SBA guarantees loans that are provided in the private 
sector. Guaranteed loans are to be used by entrepreneurs to obtained 
spectrum in auction or in secondary spectrum markets. An approved 
borrower is given a letter of credit by the lender (and SBA). The 
Federal Communications Commissions accepts this letter of credit in 
lieu of any up front payment or earnest money deposit required by 
Commission regulation. In addition, the SBA Administrator may make loan 
guarantees (guarantees on private sector loans) for telecommunications 
equipment and working capital necessary to carry out the terms of the 
license to be financed. The SBA Administrator requires, as a condition 
of any direct loan and any loan guarantee, that (1) any disbursement of 
a loan amount be fully protected by a secured interest in the proceeds 
of sale or other assignment of the license involved; (2) the loan 
agreement contain specific measures by which, in the case of default by 
the borrower,

[[Page E663]]

the lender may require the borrower to sell or otherwise assign the 
license.
  I believe the ``Small Business Spectrum Ownership Opportunities Act 
embodies the essence of this statement by making economically 
disadvantaged small business owners not only consumers of technology 
but also producers of technology. I hope that all my colleagues will 
join me in supporting this important initiative.

                          ____________________