Earlier in the month, Android Headlines reported that T-Mobile US were requesting a greater proportion of spectrum be set aside for smaller wireless operators (including, of course, itself) during the government auction to be held next year. Although a decision is not thought to be imminent, Reuters has reported that the US regulator appears to be moving to rejecting T-Mobile’s request rather than supporting it. T-Mobile’s request is purportedly to stop the larger US carriers (AT&T and Verizon) from acquiring a significant amount of spectrum, which would raise the barriers to entry and make life doubly difficult for the smaller telecom players in these markets. Both AT&T and Verizon have deeper pockets than T-Mobile US, Sprint or indeed the smaller competitors such as Dish. The current ruling means that 30 MHz, less than half, of the spectrum is reserved for the smaller carriers.
The FCC, Federal Communication Commission, has a difficult decision to take because by limiting the amount of spectrum that the larger market players can bid for or win, effectively limits the money that may be generated by the auction. And here, the auction is for the low frequency spectrum, which is currently occupied by various broadcasters. Low frequency spectrum is potentially very valuable to the carriers because of its ability to penetrate buildings and solid objects, which makes it much cheaper to roll out a high speed data network using relatively fewer masts compared with high frequency coverage. These broadcasters are being paid to relinquish their control over the airwaves: any reduction in the amount of spectrum that AT&T or Verizon can bid for will drop down to the compensation that these operators receive by selling on their licence. Naturally enough, the television broadcasters want as much cash as they can for giving up their spectrum. The auction that concluded in January raised over $40 billion.
The situation appears to be something of a minefield between the large carriers with deep pockets, the smaller carriers wishing to remain competitive and the broadcasters, wishing to maximise their compensation for giving up the spectrum. At this juncture, no recommendation or decision has been made but the FCC staff’s rumored thinking is that sufficient spectrum has already been set aside for the smaller telecom players. T-Mobile US’ senior vice president of government affairs has optimistically said he is confident the FCC “will do the right thing by consumers in this auction and make sure AT&T and Verizon don’t further consolidate their control over wireless access to the Internet.” This is a developing situation and we will keep you updated as we hear more news.