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AT&T accuses DOJ of favoring T-Mobile, Sprint for 600 MHz auction

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AT&T (NYSE:T) accused the Department of Justice of attempting to rig the upcoming 600 MHz incentive auction to ensure that the two smaller nationwide carriers--Sprint Nextel (NYSE:S) and T-Mobile USA--could win most of the spectrum up for grabs.

In a letter to the FCC, AT&T said that DOJ's suggestion that AT&T and Verizon (NYSE:VZ) would be bidding on the low-frequency spectrum merely to "foreclose" access to it is wrong. In addition, it said that the DOJ's urging of the FCC to intervene and make sure Sprint and T-Mobile end up with that spectrum is not only unlawful but also puts the auction in jeopardy. "It is surprising that the Antitrust Division of the Department of Justice would even propose measures that are so nakedly designed to help specific companies," wrote Wayne Watts, AT&T's senior executive vice president and general counsel.

In a filing earlier this month, the Justice Department asked the FCC to develop auction rules designed to promote competition and that would ensure that Verizon and AT&T do not shut out smaller carriers in the bidding. Watts called this action an effort by regulators to pick "winners and losers."

Watts also noted that both Sprint and T-Mobile are in merger negotiations that could boost their financial situations. T-Mobile is in the process of merging with MetroPCS (NYSE:PCS) and Sprint is weighing competing bids from Japan's Softbank and Dish Networks.

The 600 MHz auction is expected to be held in 2014 or later. Last week, six Republican members of the House of Representatives wrote to the FCC warning that putting caps on how much spectrum one provider can own would limit AT&T and Verizon's participation in the auction and may lead to lower bids for spectrum.

For more:
- see AT&T's post and letter to the FCC (PDF)
- see this Reuters report
- see this WSJ report (sub. req.)
- see this DSL Reports story

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