Federal Communications Commission Chairman Tom Wheeler is recommending the agency deny requests to set aside more spectrum for wireless carriers that are smaller than AT&T and Verizon in next year’s highly anticipated incentive auction for low-band spectrum.
Wheeler’s recommendation, if adopted by at least two of his fellow commissioners, would deal a blow to T-Mobile US, which has petitioned the FCC to increase the spectrum reserve from 30 megahertz to 40 megahertz, or half of the available spectrum in the next auction. Others also have requested the FCC set aside more spectrum.
In a blog Wednesday, Wheeler said the draft order he was circulating to his colleagues “concludes that the current reserve size of 30 megahertz balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.”
Wheeler also announced proposed competitive bidding rules that are intended to free up spectrum for small businesses, including rural service providers and businesses owned by women and minority groups. One of several proposals would eliminate joint bidding agreements.
“At the same time, our reforms will enhance the integrity of the FCC’s auctions and ensure large corporations can’t game the system,” Wheeler wrote.
The FCC commissioners are scheduled to vote on the proposals on July 16 during an open meeting.
Responding to the chairman’s proposal to maintain the 30 megahertz spectrum reserve, T-Mobile said consumers would benefit if others beside AT&T and Verizon obtained licenses to the airwaves.
“Low-band spectrum is the holy grail for AT&T and Verizon. If others get it, and the Big Two have to compete on price, their customers alone would save over $20 billion per year,” T-Mobile said. “That’s why everyone with a wireless phone has a stake in the outcome of this proceeding, and the FCC should heed the calls of DoJ, many in Congress and a slew of consumer groups and move to strengthen the reserve.”
AT&T and Verizon did not immediately comment on Wheeler’s reserve proposal, but they have both opposed setting aside more spectrum for smaller carriers.
In May, Verizon’s senior vice president, Kathleen Grillo, characterized the requests as “a case of greed masquerading as need.”
“T-Mobile, Sprint and DISH may play the sympathy card at the FCC,” Grillo blogged, “but they are multibillion-dollar corporations capable of bringing serious money to the auction table and bidding for spectrum on the same terms as everyone else.”
Earlier this month, in an uncensored video, T-Mobile CEO John Legere referred to his bigger rivals as “Dumb” and “Dumber” and claimed “they’re pushing the government to look the other way while they play keep away with your mobile future by once against dominating a government spectrum auction.”
About the only thing the nation’s wireless rivals can agree to when it comes to the incentive auction is that it’s very important to the wireless industry. According to some estimates, the auction could fetch between $40 billion and $80 billion.
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