Verizon, AT&T oppose Dish, T-Mobile's plans to split AWS-3 auction

Verizon Wireless (NYSE: VZ) and AT&T (NYSE: T) have signaled their opposition to proposals from T-Mobile US (NYSE:TMUS) and Dish Network (NASDAQ: DISH) to effectively split the upcoming auction of AWS-3 spectrum between paired and unpaired airwaves.

The auction is scheduled to start on Nov. 13 and will be the most consequential since the 2008 auction of 700 MHz spectrum. The FCC plans to auction the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz bands, which are collectively known as AWS-3. The FCC is currently working on technical rules for the auction.

The 1695-1710 MHz band will be unpaired spectrum used for low-power uplink operations. The 1755-1780 MHz band will be licensed for low-power uplink operations and will be paired with the 2155-2180 MHz band for downlink operations.

T-Mobile wants the FCC to treat the unpaired 1695-1710 MHz spectrum differently from the paired 1755-1780 MHz and 2155-2180 MHz bands. In an FCC filing, the carrier argued that not only will licensees in these bands "have different technical requirements, but they will also have different obligations with respect to coordination with federal users. The different requirements and configuration of these bands mean that they are not substitutes for each other."

T-Mobile thinks the FCC should adopt different auction rules for the different bands. "If, for instance, bidding activity stops on the 1695-1710 MHz band, the auction for that band should close," the carrier wrote. "There is no reason to keep the auction open for that spectrum, even if bidding activity continues for the paired 1755-1780 MHz/2155-2180 MHz bands. Such an approach will add certainty to the auction process and avoid delaying the close of the auction any longer than necessary, which is particularly important in light of the upcoming statutory deadline to auction the AWS-3 bands," which is February 2015.

Further, T-Mobile warned of negative consequences if the FCC keeps all of the bidding bundled together. "A contrary approach--leaving the entire auction open even when interest in one band diminishes--may prompt insincere bidding by, for example, allowing bidders interested in one band to "park" bids in another merely to preserve eligibility, artificially prolonging the auction."

In a July 9 filing, Dish essentially agreed with T-Mobile's arguments on AWS-3.

Verizon, in a July 16 filing, responded and wrote that "we oppose Dish's proposal to bifurcate the auction into two separate auctions, one for the 1695-1710 MHz band and another for the paired spectrum at 1755-1780/2155-2180 MHz." In a mirror of T-Mobile's argument, Verizon wrote that such a plan would "needlessly complicate the auction, requiring FCC staff and bidders to track bidding eligibility, activity waivers, and stopping rules separately for two auctions, and we questioned Dish's assumption that the two bands are not substitutes for one another."

In a July 15 filing, AT&T, for its part, said the company rejects "the proposal by T-Mobile and Dish to have separate auctions for the paired and unpaired AWS-3 bands."

Meanwhile, the National Telecommunications and Information Administration (NTIA) recently published federal agencies' transition plans for vacating or sharing AWS-3 spectrum. The agencies' transition plans provide information on the 1695-1710 MHz and 1755-1780 MHz bands and include timelines outlining when agencies will discontinue use of the bands or be ready to share them with carriers, and provide estimates of the cost of relocating or sharing in the bands.

For more:
- see this NTIA release
- see this T-Mobile FCC filing
- see this Dish FCC filing
- see this Verizon FCC filing
- see this AT&T FCC filing

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