T-Mobile: FCC's tentative AWS-3 spectrum auction rules favor Verizon, AT&T
T-Mobile US (NYSE:TMUS) warned the FCC not to structure the upcoming AWS-3 spectrum auction in such a way that it would tilt the playing field toward AT&T (NYSE:T) and Verizon Wireless (NYSE:VZ). AT&T recently praised a tentative, but not final, license structure and band plan for the auction.
The back and forth highlights the importance of the auction and also how the carriers are going to continue to fight over spectrum policy and auction design for months to come. The AWS-3 auction fight is notable in light of the fact that T-Mobile has lobbied for years for the FCC and other federal agencies to cobble together the spectrum that will be auctioned.
In a company blog post, Kathleen Ham, vice president of federal regulatory affairs at T-Mobile, wrote that the FCC should auction AWS-3 spectrum in 5x5 MHz blocks to "ensure the auction does not become a playing field for only Verizon and AT&T."
Ham noted that "not surprisingly, Verizon and AT&T are advocating for big blocks covering big geographic areas. However, an auction with too many large blocks is a configuration that has the real potential to dissuade competitive carriers from participating in the auction. By contrast, smaller spectrum blocks with a mix of large and small geographic areas will provide the greatest opportunity for a wide variety of bidders to participate and obtain licenses that match their licensing needs."
According to an FCC official familiar with proposal for the AWS-3 auction, the auction will have two sub-bands, each with its own band plan. One of the sub-bands will consist of one unpaired 5 MHz block (1695-1700 MHz) and one unpaired 10 MHz block (1700-1710 MHz), licensed in Economic Area (EA) geographies. The other sub-band will consist of paired spectrum: one 5x5 MHz block (1755-1760 and 2155-2160 MHz) licensed in Cellular Market Area (CMA) geographies, and two 10x10 MHz blocks (1760-1770 and 2160-2170 MHz, and then 1770-1780 and 2170-2180 MHz) licensed in EA geographies.
Earlier this week, AT&T cheered this structure for the AWS-3 auction.
"The 10x10 MHz blocks will appeal to AT&T and Verizon because they are larger and being auctioned in fewer geographic regions, making it easier to build a nationwide spectrum position," wrote BTIG analyst Walter Piecyk. "The 5x5 MHz block will appeal to T-Mobile, which owns the adjacent spectrum in 20 of the top 35 markets."
The FCC will vote on the rules for the AWS-3 auction during its March 31 open meeting. The FCC is proposing to auction the 1695-1710 MHz, 1755-1780 MHz, and 2155-2180 MHz bands, collectively known as AWS-3.
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2155-2180 MHz band (could be paired with 1755-1780 MHz band) - Spectrum auction guide