T-Mobile (NYSE:TMUS) continued to urge the FCC to deny AT&T's (NYSE: T) request to acquire low-band spectrum in a handful of rural markets, claiming the move is "AT&T's latest attempt to raise its rivals' costs at the expense of consumers."
AT&T last May sought consent from the FCC to buy three lower 700 MHz C Block licenses in parts of Kentucky, Ohio and West Virginia for an undisclosed sum. AT&T claims the licenses, which are currently owned by East Kentucky Network, will enable it to increase capacity, enhance existing services and launch new products and services in those markets.
T-Mobile began to fight AT&T's move almost immediately, and it filed documents this week saying such an acquisition would violate rules the FCC adopted in 2014. Those rules dictate that transactions resulting in a carrier gaining control of one-third of spectrum below 1 GHz in any given market be subject to "enhanced review" in the agency's case-by-case competitive evaluation of spectrum deals. The rules are part of the FCC's broader mobile spectrum holdings order and are aimed at maintaining "the benefits that competition provides" in every market.
"But with the FCC having never denied a transaction under this standard, the aspiration words of the Mobile Spectrum Holdings Order have begun to ring hollow," according to T-Mobile's filing. "If ever there were a transaction the FCC should deny under 'enhanced factor' review, it is AT&T's proposed acquisition of low-band spectrum in parts of West Virginia, Ohio and Kentucky. These are mostly rural markets where AT&T already controls 60 percent of the market in some areas and stands to benefit from excluding competitive entry."
T-Mobile went on to say that approval of the transaction would set a dangerous precedent by eliminating any incentive for AT&T to stop compiling low-band airwaves in rural areas. Denying the deal, conversely, would encourage current license-holders to either fully deploy services over them or to sell licenses to other service providers.
"Unlike an acquisition by AT&T, either of these latter options would enhance competition and promote the public interest in the timely and cost-effective deployment of broadband services to the public," T-Mobile wrote. "For its part, T-Mobile stands ready to acquire the spectrum in these markets at market-based, non-foreclosure prices, and if allowed to do so, will deploy the spectrum quickly for the benefit of consumers."
T-Mobile's opposition to the deal is part of a larger effort by the carrier to prevent the nation's two largest carriers from acquiring more low-band spectrum. Last August, the operator lost its year-long fight to increase the spectrum reserve in the upcoming incentive auction from 30 MHz in a given market to 40 MHz. The decision was viewed as a victory for AT&T and Verizon (NYSE: VZ) and a significant blow to T-Mobile and smaller carriers.
- see this FCC filing
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