Sprint, T-Mobile and others want FCC to scrutinize AT&T's recent spectrum purchases

Sprint (NYSE: S), T-Mobile US (NYSE:TMUS) and several public interest and industry organizations want the FCC to more closely scrutinize some of AT&T's (NYSE: T) recently proposed spectrum deals for low-band airwaves, especially 700 MHz spectrum. Specifically, they want the FCC to employ its recently announced "enhanced factor" review for low-band spectrum acquisitions.

In a letter to FCC Chairman Tom Wheeler and the four other FCC commissioners, representatives from Sprint and T-Mobile noted that the FCC determined in May that transactions resulting in a carrier gaining control of one-third of the spectrum below 1 GHz in a given market--which equates to roughly 45 MHz of low-band spectrum--"will be subject to enhanced review" in the FCC's case-by-case competitive evaluation of spectrum deals.

The letter was also signed by representatives from Public Knowledge, Free Press, the New America Foundation, Comptel, the Computer & Communications Industry Association and the Writers Guild of America, West.

"Seizing on an as-yet undefined 'enhanced factor' review for low-band spectrum concentration, AT&T recently filed for a number of transactions that, if granted, would result in AT&T holding more than 45 MHz of low-band spectrum in numerous markets," the letter notes. "AT&T is a dominant carrier nationally and in these regions; therefore, the Commission should carefully scrutinize such applications to give meaning to the high hurdle 'enhanced factor' review creates and to protect against further anti -competitive concentration of low-band spectrum."

"AT&T is confident that after a careful, enhanced factor review, the Bureau will conclude that ... these small deals will cause no harm to competition and will result in significant public interest benefits," an AT&T spokesperson told FierceWireless.

According to the FCC's filing system, in the past several months AT&T has made several purchases that are pending approval by the FCC. They include a deal with Kaplan Telephone Company for 700 MHz C Block licenses; with Worldcall Inc. for two 700 MHz B Block licenses in Puerto Rico; with Club 42 CM Limited Partnership for two 700 MHz B Block licenses in California; with KanOkla Telephone Association for one 700 MHz C Block license in Kansas and one 700 MHz C Block license in Oklahoma; with Consolidated Telephone Company for two 700 MHz C Block licenses in Minnesota; and with Star Wireless for four 700 MHz C Block licenses in Wisconsin and Iowa. The financial values of the various transactions were not revealed.

"While even in standard transactions applicants already 'bear the burden of proving, by a preponderance of the evidence that the proposed transaction, on balance, will serve the public interest,' 'enhanced factor' review increases this already substantial burden of proof by requiring the applicant to provide a 'detailed demonstration' of why the public interest benefits outweigh the obvious harms," the companies wrote in the letter. "Only where the applicant can demonstrate 'a low potential for competitive or other public interest harm,' can it acquire the additional low-band spectrum. Absent that detailed and persuasive demonstration, the Commission will find that the low-band transaction causes competitive harm and must be presumptively denied."

"Permitting AT&T, already the largest competitor in most of these markets, to purchase this low-band spectrum would deny competitors the opportunity to enter or expand services in the market and result in further concentration of market share in the affected geographic areas," the companies concluded.

The FCC has acknowledged the importance of low-band spectrum in other proceedings. For example, earlier this year the FCC approved 600 MHz incentive auction rules designed to prevent Verizon Wireless (NYSE: VZ) and AT&T from acquiring all the available spectrum up for grabs. The rules currently reserve up to 30 MHz of spectrum for smaller carriers like Sprint, T-Mobile and others--though T-Mobile is currently pushing the commission to increase that set-aside.

For more:
- see this FCC filing (PDF)

Related Articles:
T-Mobile wants FCC to reserve up to half of all 600 MHz spectrum for smaller carriers
Sprint, T-Mobile could be barred from joint bidding in 600 MHz under FCC proposal
FCC's Wheeler lays out plan to draw broadcasters into 600 MHz incentive auction
FCC bars package bidding in 600 MHz auction, dealing another blow to Verizon and AT&T
Mosaik: Verizon could face bidding restrictions across much of country in 600 MHz auction
AT&T to buy up to 40 MHz of spectrum in incentive auction, but Verizon remains aloof

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