FCC's Wheeler: Carriers are engaging in normal pre-auction positioning and 'shenanigans' ahead of 600 MHz auction

FCC Chairman Tom Wheeler suggested that wireless carriers that are being coy about how much they will participate in next year's incentive auction of 600 MHz broadcast TV spectrum are simply positioning themselves and trying to throw off their competitors from discerning their true intentions.

"I think we'll have a very successful auction, which, by the way, starts in 157 days for any of you keeping score out there. I think what we're seeing now is the market has begun," Wheeler said during a press conference after the FCC's open monthly meeting. "Everybody's positioning a little bit. 'Well, maybe I'm not going to show too many cards about whether I'll participate. Or maybe I'll keep focusing about this person decides to participate or not.' This is all pre-auction shenanigans that one can expect happens in any kind of marketplace."

Sprint (NYSE: S) has decided not to participate, saying it has all of the spectrum it needs, particularly via its vast trove of 2.5 GHz airwaves.  T-Mobile US (NYSE:TMUS) has been the most enthusiastic about participating. AT&T (NYSE: T) and Verizon (NYSE: VZ) have indicated they plan to participate but have to indicated how much. Earlier this week Verizon Communications CFO Fran Shammo said the company plans to participate in the auction and that there are "areas where we could use lower band spectrum but it's probably not the top priority. We like the higher band like AWS."

Wheeler said he is "confident that there will be be multiple broadcast licensees putting up their spectrum for auction, and that there will be multiple forward auction bidders to use that spectrum for competitive wireless services.  

Wheeler noted that the FCC set an average price of $1.25 per MHz-POP in the top 40 Partial Economic Areas that the auction needs to achieve, but also indicated that he thinks the auction's success should not be tied to how much revenue it raises. "This is not keeping score by dollars and cents," he said. "This keeping score by how much spectrum can you allow marketplace to repurpose."

CTIA President Meredith Attwell Baker said at an event on Wednesday in Washington that even though the AWS-3 spectrum auction raised nearly $45 billion in gross winning bids in January, the industry has more to spend. "To my broadcast friends, rest assured we have billions more for the next auction," she said, according to Broadcasting & Cable.

Meanwhile, the National Association of Broadcasters has petitioned the FCC to "clarify that stations not participating in the auction will not be treated differently than participating stations." The NAB is worried that stations that do not give up their spectrum will be moved into the wireless portion of the 600 MHz band and be subject to harmful interference. The NAB has said that its reading of the FCC rules indicate that "the only TV stations that can be placed in the 600 MHz band are those stations that do not participate in the auction" when they are repacked and moved around after the broadcasters give up their spectrum.

"We understand that the Commission rejects the assertion that 'stations assigned to the 600 MHz Band will be disadvantaged in comparison to stations located in the remaining TV bands.' According to the FCC, stations assigned to the 600 MHz band will receive the same 'robust' protections in the repacking process as other stations, including preservation of coverage area and population served, reimbursement for relocation costs, and protection from inter-service interference. Nonetheless, regardless of these assurances, no broadcaster would voluntarily choose to be relocated in the 600 MHz band."

Wheeler rejected the notion that the FCC is forcing the broadcasters to give up their spectrum. "There are no armed FCC agents holding guns to heads of broadcasters," he said. "You are free to decide whether you want to participate or not and I think that's the definition of 'voluntary.'"

For more:
- see this Broadcasting & Cable article 

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T-Mobile seen as favorite to win spectrum in 600 MHz auction, but smaller carriers likely to jump in as well
AT&T's Lurie: $60B from the 600 MHz incentive auction is 'unrealistic'
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