T-Mobile seeks to boot Verizon from reserved spectrum in a dozen incentive auction markets

T-Mobile US (NYSE:TMUS) is asking the FCC to prevent Verizon (NYSE: VZ) from bidding on reserved spectrum in a dozen markets across the United States. The action again underscores the behind-the-scenes clashes between the nation's biggest wireless carriers as they work to improve their position going into next year's 600 MHz incentive auction of TV broadcasters' unwanted spectrum.

In a new filing with the FCC, T-Mobile said that the agency "incorrectly identified Verizon as reserve-eligible" in 12 markets across the country, including in Oklahoma, Texas, Illinois, South Dakota, New Mexico and elsewhere.

"Confirming the accuracy of the reserve-eligibility list will help achieve the important public interest goal of protecting against excessive concentration of low-band spectrum holdings by the nation's dominant wireless providers while ensuring competitive bidding," T-Mobile said in the filing.

In its filing, T-Mobile listed Verizon's total low-band spectrum holdings in each of the markets (generally around 43 MHz) and argued that "Verizon therefore has an interest in more than one-third of the suitable and available low-band spectrum and is ineligible for the spectrum reserve."

In its rules for next year's incentive auction, the FCC created a "spectrum reserve" that essentially withholds blocks of spectrum from bigger carriers so that smaller carriers can bid on it. Specifically, the "set aside" airwaves -- up to 30 MHz in a given market -- are withheld from carriers that already own large chunks of low-band spectrum.

Last month, the FCC published a document that specifically lists every Partial Economic Area (PEA) where the four Tier 1 carriers can bid on reserve spectrum. The document showed that Sprint (NYSE: S) and T-Mobile can bid on the reserve spectrum in all 416 PEAs.

AT&T (NYSE: T) is eligible to bid in 242 of the PEAs and Verizon can bid on reserved spectrum in 112 PEAs.

In its new filing, T-Mobile is working to prevent Verizon from being able to bid on reserved spectrum in additional markets. The action could point to the reserved spectrum licenses that T-Mobile may be interested in bidding on. By removing Verizon as a bidding competitor, T-Mobile may be able to obtain the licenses for less money.

Moreover, T-Mobile hinted to the FCC that it's not finished yet. "T-Mobile or other parties may yet identify additional corrections to the FCC's reserve-eligibility list. T-Mobile therefore reserves the right to submit additional corrections for FCC review," the carrier said in its filing.

T-Mobile has made it clear it plans to participate in the auction and could spend as much as $10 billion on licenses. AT&T and Verizon are expected to participate as well. Sprint recently said, however, it will skip the auction altogether.

For more:
- see this FCC filing

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