When it comes to the world of mobile carriers in the United States, there is an obvious tip in the balance of control. Primarily, Verizon and AT&T hold the lion’s share of the low-end spectrum with around 73 percent combined. That does not leave much room for the smaller carriers such as T-Mobile and Sprint. While recently during the AWS-3 Spectrum auction T-Mobile was able to fork out $1.8 billion and snag up more spectrum, they felt that they got short handed by the likes of Verizon and AT&T. It was reported that T-Mobiles John Legere – their colorful and outspoken CEO - made a blog post where he felt that the auction “should scare the hell out of you and every other wireless consumer in the US.” He noted that Verizon and AT&T both have deep pockets and that combined they take home a huge $162 billion in revenue annually. He went on to ask for better ways to hold future auctions that would make it fairer for smaller telecommunication carriers by reserving 40 MHz of spectrum and thus leveling the playing field.
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However, AT&T did not see things the way John Legere and company see them. In a blog post by Joan Marsh, AT&T’s vice president of federal regulatory, she fired back at John Legere comments by arguing that AT&T was not the cause of T-Mobiles issues during the auction, but rather Dish was. She also felt that John Legere should stop complaining about how the auction turned out when T-Mobile removed money – $2 billion worth according to AT&T – from the table during bidding. Marsh stated that “from a strategic perspective, one can surmise that T-Mobile came to the auction with a $3.5 [billion] budget but, as valuations rose, decided to take some of its capital off the table, which was certainly its prerogative to do. But you can’t withdraw capital from the auction then complain that you didn’t win.” She went on to state: “In the end, Dish – a company with less revenue than T-Mobile and no wireless subs – showed up with a $10B budget (which it turned into $13B in spending power with the taxpayer’s help) and simply ran T-Mobile out of much of what it wanted. And you can’t blame that on us.”
The battle between AT&T and T-Mobile will no doubt continue for some time. With the 600 MHz spectrum auction to come, we can expect a few more elbow-jabs between the major telecommunications companies. The carriers all have different ideas on how the auctions should change in the future and different views as to what constitutes a level playing field that is fair for everyone. The FCC will have a challenge on their hands keeping things in order and making an effort to keep things as fair as possible. It is unclear if the FCC will make changes to any auctions or bidding processes moving forward, but they will not doubt take what they have learned from this previous auction and make a good faith effort to ensure that innovation isn’t impeded while protecting the American consumer. For now we will just have to wait and see how the 600 MHz auction pans out and hope that when it is all said and done, everyone will walk away happy.