With the next incentive spectrum auction fast approaching, it looks like the Department of Justice wants to make sure every carrier gets their “fair share” of the available frequencies. According to reports the DOJ has told the Federal Communications Commission that both Sprint and T-Mobile should be given every opportunity to acquire the highly coveted wireless spectrum.
In a filing with the FCC, the antitrust division of the Justice Department argues:
“The Department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carriers and benefit consumers”
The spectrum that is being auctioned is in the 600MHz frequency band, a low frequency that is being given up by television broadcasters in order to be used by wireless carriers. It is important to point out that spectrum in any frequency lower than 1GHz is the most sought after because if it’s ability to travel great distances and penetrate large buildings. There is actually another proceeding happening that will put a cap on the amount of spectrum that one carrier can own and more specifically in these low frequencies.
This upcoming auction is big for the nation’s number three and four carriers as they look to expand their 4G LTE footprint. In a similar auction in 2008 both AT&T and Verizon gobbled up the majority of the 700MHz frequency, which is currently being employed to operate their respective LTE networks. As is stands now T-Mobile has no sub 1GHz spectrum and Sprint has a very small amount of it.
The DOJ says it doesn’t want the two largest mobile operators in the country to control so much of the spectrum as it will stifle competition. In addition without any rules in place they fear that the Verizon and AT&T, who have more money to spend, would buy the frequencies just to keep them away from their competitors.
“The more concentrated a wireless market is, the more likely a carrier will find it profitable to acquire spectrum with the aim of raising competitors’ costs. This could take the shape, for example, of pursuing spectrum in order to prevent its use by a competitor, independent of how efficiently the carrier uses the spectrum.
Spectrum is a scarce resource and a key input for mobile wireless services. The Commission has an opportunity through its policies on spectrum holdings to preserve and promote competition and to ensure that the largest firms do not foreclose other rivals from access to low-frequency spectrum that would allow them to improve their coverage and make them stronger, more aggressive competitors.”
AT&T’s vice president for federal regulatory affairs Joan Marsh has argued in the past that the reason that Sprint and T-Mobile don’t own any of the 700MHz spectrum was because they didn’t participate in the auction at all. In fact when the nationwide C Block of the 700MHz spectrum license went up for bidding there were only two competitors, Verizon and Google.
It remains to be seen how this all will play out but T-Mobile actually wants the larger carriers in on the competition. Kathleen Ham, a vice president of regulatory affairs for T-Mobile believes that AT&T and Verizon are needed “because it will ensure that a large ecosystem is built to create devices for this spectrum.” It’s a funny argument to both want the big guys in on the competition while not wanting them to win the competition.
We’ll be sure to let you all know how this all ends when the auction gets underway.