The “Un-carrier” wants regulators to increase reserve for upcoming 600 MHz auction
In a June 2 letter to Federal Communications Commission Chairman Tom Wheeler, T-Mobile US pushed for the feds to include a larger reserve of 600 MHz spectrum in an upcoming auction to foster competition among carriers.
T-Mobile US CTO Neville Ray stressed the importance of the 600 MHz spectrum band while driving home the point that in order to compete against Verizon Wireless and AT&T Mobility, competitors need access to more spectrum in the band. The carrier has been arguing for months that the FCC should set aside a portion of potential spectrum licenses for participants currently controlling a smaller percentage of sub-1 GHz spectrum licenses.
“Mobile broadband providers need largely unimpaired, low-band spectrum to compete effectively in the wireless marketplace, but the two dominant providers currently hold more than 73% of all low-band spectrum available for commercial use across the entire industry today,” Ray wrote.
Ray asked that Wheeler and the FCC increase the amount of spectrum set aside from 30 megahertz to at least 40 megahertz, that carriers with dominant sub-1 GHz spectrum holdings like Verizon Wireless and AT&T Mobility cannot bid on. Ray said the move “will give competitive carriers an opportunity to secure the low-band spectrum necessary to provide more extensive and more reliable service in urban and suburban areas, and deploy new competitive services in less-populated areas of the country.”
Ray differentiated between the 600 MHz band and other portions of spectrum by stating “all spectrum is not created equal,” adding that the band in question is “particularly valuable” because it penetrates buildings more easily and covers more area with less infrastructure.
T-Mobile US has been aggressively increasing its position in the highly competitive domestic carrier market, but the company, along with Sprint, are still considerably smaller than Verizon Wireless and AT&T Mobility.
“Without a reserve of at least 40 megahertz, AT&T and Verizon will be able to increase their low-band spectrum holdings, entrench their dominant positions in the wireless marketplace, and choke off any threat of competition in the future,” Ray wrote. “Verizon and AT&T have deployed networks in many areas of the country that would not be economically feasible without low-band spectrum’s exceptional propagation characteristics.”
Ray pointed to the FCC’s Auction 97 as evidence of AT&T and Verizon Communications’ stranglehold on the industry. The auction, which raised a record $41.3 billion in net proceeds, finished with AT&T as the biggest spender, and, in combination with Verizon Communications, accounted for two-thirds of total proceeds generated.
Ray wrote that AT&T and Verizon “foreclosed any meaningful competition from direct competitors by outspending all other facilities-based wireless carriers by more than ten to one. So while implementing a spectrum reserve in the 600 MHz Auction to ensure that a variety of competitors have access to low-band spectrum is a step in the right direction, 30 megahertz is simply insufficient to promote the competitive environment that our industry so desperately needs.”
Ray’s argument could be short-lived as recent reports have linked the nation’s No. 4 mobile operator to Dish Network, which came out as the second-largest spender in Auction 97. Dish bid more than $13 billion in winning licenses, but managed to snare a controversial $3 billion discount as it participated through a pair of designated entities.
