Sprint, T-Mobile, CCA and others again urge restricting Verizon, AT&T in 600 MHz auctions

The start of the 600 MHz broadcast TV spectrum incentive auctions may have been pushed from this year to the middle of 2015, but the fight to define rules that might restrict the ability of Verizon Wireless (NYSE:VZ) and AT&T Mobility (NYSE:T) to acquire airwaves in the auctions rages on. Last week, representatives from Sprint (NYSE:S), T-Mobile US (NYSE:TMUS), U.S. Cellular (NYSE:USM), Dish Network (NASDAQ: DISH) and a wide array of associations and public interest groups met with FCC officials and urged for those restrictions.

Other companies groups that lobbied with Sprint and T-Mobile included C Spire Wireless, the Competitive Carriers Association, the Rural Wireless Association, the New America Foundation, Public Knowledge, the Computer & Communications Industry Association and the Writers Guild of America. They met jointly with legal advisors to the FCC commissioners and Chairman Tom Wheeler.

In the meetings, they pressed for restrictions to be placed on AT&T and Verizon and noted that the two larger carriers "have a powerful economic incentive to acquire the remaining low-band spectrum they do not already control in order to prevent competitors from undercutting them with superior service, pricing, terms, or technology."

In their filing, the companies pointed out that AT&T and Verizon have the highest spectrum book values, as reported to the SEC. The figures are in billions of dollars.

"Reasonable spectrum-aggregation limits prevent this outcome and will promote and preserve competition that can reduce prices, increase consumer choice, encourage investment and innovation, and accelerate next generation mobile deployment, especially in rural and historically underserved markets," the companies argued.

AT&T and Verizon have generally pushed against such spectrum aggregation limits, arguing that setting them in place would amount to picking winners and losers in the auction, and will deprive the planned nationwide public safety broadband network FirstNet of needed funding by depressing auction revenues.

Although T-Mobile is seeking FCC approval to acquire lower 700 MHz A Block spectrum from Verizon, it is still arguing for limits. In a presentation the companies and groups made to the FCC officials, they said that "adopting a no-nonsense, ex ante spectrum aggregation limit" will have several benefits, including that it "mitigates the risk of predation to deter market entry; increases auction participation; creates the potential for higher auction revenue; promotes investment and innovation; protects FirstNet funding; enhances consumer choice; drives growth in a critical sector of the U.S. economy; and heightens clarity, certainty and predictability for all carriers."

Verizon, in a separate filing, aggressively pushed back on the notion. On Jan. 23, Kathleen Grillo, senior vice president of federal regulatory affairs at Verizon, met with Matthew Berry, chief of staff to Commissioner Ajit Pai. In the meeting, she urged the FCC to update its spectrum screen to include "all suitable and available spectrum," including the 2.5 GHz Broadband Radio Service and Educational Broadband Service spectrum Sprint is using to deploy LTE.

She also said, according to a Verizon filing, that the FCC should "reject requests to restrict the ability of Verizon and AT&T to participate" in the incentive auctions, "which will reduce auction revenues and risk outright auction failure. Instead, it should adopt rules that encourage the broadest possible participation by broadcasters and wireless carriers alike, in order to maximize the amount of spectrum repurposed for mobile broadband and fund FirstNet and deficit reduction."

For more:
- see this FCC filing
- see this Verizon filing

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