T-Mobile is using its considerable legal muscle to try and prevent the terms of its 2.5 GHz spectrum leases from being revealed.
This is particularly newsworthy right now because the FCC just recently announced it would kick off the process for its Auction 108 in July. Auction 108 is the auction of 2.5 GHz spectrum in the “white-space” gaps in the band that are currently lying fallow. Sometimes the auction is referred to as “an overlay auction.”
When 2.5 GHz spectrum was first distributed to educational institutions in the 1980s, the licenses were granted in 35-mile-radius circles. Unfortunately, the circles leave oddly-shaped white spaces where no one owns the spectrum. This is the spectrum that will be available via Auction 108.
According to a filing by Verizon, Auction 108 will comprise more than 8,000 licenses.
T-Mobile is seen as the primary bidder in the auction because it wants to fill in the gaps in its nationwide 2.5 GHz coverage. Some wireless internet service providers (WISPs) also use the band and may participate in the auction.
Meanwhile, AT&T and Verizon want to see the terms of T-Mobile’s leases with the educational institutions in order to make informed decisions about bidding. If they don't see the terms of T-Mobile's leases, then they likely won't participate in Auction 108. Hence, it won't be a very competitive auction.
2.5 GHz leases are treated like gold at T-Mobile
But T-Mobile is fighting hard to ensure that its competitors do not see the terms of its 2.5 GHz leases. It has made numerous FCC filings, and it’s also reached out to some of the educational institutions it leases spectrum from, directing them to not reveal any terms of the leases and to take down or redact sensitive information in leases that might have been posted online.
According to letters sent to some schools, which were reviewed by Fierce Wireless, T-Mobile really, really does not want the pricing terms of its leases revealed. T-Mobile considers the pricing terms to be “trade secrets.” One letter sent from T-Mobile’s law firm Williams & Connelly states, “Disclosure of this confidential information would affect T-Mobile’s standing in extremely competitive spectrum negotiations.”
Interestingly, the letters from T-Mobile’s law firm also said that access to T-Mobile’s 2.5 GHz leases are only known by fewer than .1% of T-Mobile employees. “Employees with access are educated as to the confidential and proprietary nature of the payment and pricing data in the Lease Agreement. Employees also undertake annual trainings on how to protect confidential and proprietary information. The Lease Agreement and its pricing terms are only accessible via a segregated T-Mobile data base."
Filings with the FCC
T-Mobile has also made several FCC filings related to the secrecy of its 2.5 GHz spectrum leases.
In a filing dated November 22, 2021, T-Mobile states, “Requiring T-Mobile to disclose lease information is inconsistent with the Commission’s rules and precedent… The information contained in T-Mobile’s 2.5 GHz leases is competitively sensitive. And leasing information is the type of trade secrets and commercial or financial information that the Commission routinely shields from disclosure under the Freedom of Information Act.”
In another filing, T-Mobile said, “Disclosure of leasing information could influence bidding strategies … and cause significant competitive harm. The Commission must not allow the auction process to be improperly used by potential bidders as a vehicle to fish for competitively sensitive information.”
Is Auction 108 being rushed?
T-Mobile is encouraging the Federal Communications Commission (FCC) to move forward quickly with the Auction 108 process. But the FCC will first have to make a decision about whether AT&T and Verizon can see T-Mobile's 2.5 GHz leases.
Fierce reached out to the FCC asking if Auction 108 was perhaps being rushed, considering the controversy about T-Mobile’s leases. Fierce also questioned the FCC about the possibility that T-Mobile would be the only large bidder in Auction 108 if the other carriers don’t feel informed enough to make bidding decisions. The FCC declined to comment.
In an ex parte filing on February 28, 2022, AT&T noted that as of 2019, there were 2,193 EBS licenses in the 2.5 GHz spectrum, and 2,046 of them were subject to long-term leases with T-Mobile. AT&T wants to see the lease terms of these licenses such as the duration of the leases, whether there are rights of first refusal to renew the lease or purchase the licenses, and lease termination provisions.
AT&T continued that T-Mobile has a crucial information advantage in the auction. “At this time, T-Mobile is the only likely bidder with information about the nature and extent of such lease provisions,” wrote AT&T.
As a side note, there are two classes of 2.5 GHz spectrum. There's the Educational Broadband Service (EBS) spectrum, which was awarded to schools for their use. This is the spectrum that T-Mobile has leases for. There is also the Broadband Radio Service (BRS) spectrum. In total, T-Mobile owns or controls about 85% of the 2.5 GHz band, of which about 45% is leased.