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FCC votes to limit AT&T, Verizon involvement in mid-2015 spectrum auction

AT&T

Even with threats from AT&T and Verizon, the FCC has gone forward and voted in favor of previously-proposed restrictions on the 2015 spectrum auction that will offer up valuable low-band airwaves to wireless carriers. The restrictions put in place will reserve portions of the spectrum going up for auction for carriers that don't already have large chunks of low-band spectrum, largely cutting out AT&T and Verizon from participating in many markets.

Though complaints from AT&T and Verizon that claimed the auction was unfairly placing restrictions on some participants made sense on the surface, the argument fell apart when you consider that those two carriers control as much as two-thirds of all low-band spectrum at this point. Opening up an auction that provides smaller carriers an opportunity to get more of this valuable spectrum makes sense, at least on that level. FCC Chairman Tom Wheeler had this to say:

"What this rule does is prevent those with current low-band spectrum from monopolizing the market in the auction by assuring that some spectrum will be available for those with insufficient amounts of spectrum to serve rural areas and penetrate buildings."

The spectrum auction is set to take place in mid-2015, when we'll find out how much money the government will be able to raise considering limited participation from the two biggest carriers in the country.

Beyond the auction, the FCC also voted in favor of expanding the "spectrum screen," which calculates how much usable spectrum is held by each carrier. With the new expansion, Sprint and Dish are both now considered to be holding even more usable spectrum due to their ownership of high-band airwaves.

Source: Yahoo Finance

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Reader comments

FCC votes to limit AT&T, Verizon involvement in mid-2015 spectrum auction

21 Comments

This is going to be great for competition. Tmo cheaper rates, better coverage = Att, Verizon lower rates. Win, Win for all

Looks like a few Verizon and AT&T lobbyists are going to be looking for new jobs after this failure. At least the revolving door back into government work is still spinning freely.

I'd say, make it fair for all carriers. Even though Verizon and ATT has a lot of spectrum, according to them they only have 1/3 of the low bands.

They hold about 2/3 of low-band spectrum. To let them get more would result in a near-monopoly, which would only hurt consumers.

This is far from unfair.

... And these carriers will respond by purchasing the smaller carriers once the auction and the license transfer is complete.

So here's what I see happening. If T-Mobile and Sprint stay separate, they will have the upper hand when it comes to the 600mhz auction. If they merge (which I think they will), the 600mhz will probably end up going to Verizon and at&t anyway. 

Better question is, will Verizon & AT&T be willing to let go of their current spectrum? What would be the purpose of having 600 & & 700 MHz spectrum in the same areas?

Hoping that Tmobile's signal gets better in my area. I know it will take a while for the results of this auction to translate into actual used spectrum but when it happens i'll be happy to leave Verizon. 

The article states that Verizon and ATT control 2/3 of the low-band spectrum. Okay. Let's say they each have 1/3. Neither has a "monopoly." And it's doubtful they are colluding to control the spectrum, given the competition between the two.

Unfortunately, there are only 2 other 1st-tier carriers -- Sprint and T-Mobile. So let's say Sprint has some spare capital (which it doesn't) and buys up the available bands. Do they have additional capital to utilize those bands? Do they have the resources to convert from CDMA (which inherently locks phones) to GSM? Put up cell towers across the country? Alternatively, is T-Mobile's parent company, Deutsche Telekom, willing to invest more $$$ in the US market?

While more competition could be a good thing for consumers, potentially lowering rates and improving customer service, having additional bands controlled by companies that lack the resources to fully utilize them could ultimately be to our detriment.