T-Mobile and Sprint have really been working to get the FCC to change some of the rules for the upcoming Incentive auction where the 600MHz spectrum will be up for auction. This spectrum is a big deal because its the lowest band ever offered to carriers. The lower the band, the more area it will cover. Which is why it’s such a big deal that T-Mobile bought all that Band 12 (700MHz) from Verizon and other regional carriers last year. As it will greatly improve their coverage, also improve their building penetration. T-Mobile and Sprint are in dire need of this spectrum come next year, although T-Mobile more than Sprint as Sprint has a ton of 800MHz spectrum they got from the Nextel merger. The two have been petitioning the FCC to make the auction more fair for the smaller guys like T-Mobile and Sprint. With AT&T and Verizon having double the number of customers, they are able to bid much higher than T-Mobile and Sprint can. Which they don’t think is fair.
In addition to that, AT&T is also petitioning the FCC, along with T-Mobile, to impose more restrictive rules. So companies like Dish can’t take advantage of them. What AT&T is referring to is the small business discount in the AWS-3 auction this past month. Where Dish got about $3 billion in discounts.
“By entering into joint bidding arrangements and combining their capital resources, competitive nationwide carriers might realize the economies of scale necessary to outbid AT&T and Verizon in the Incentive Auction and obtain critical low-band spectrum,” Sprint wrote. “Competitive carriers’ success at auction would invigorate mobile broadband performance and competition, and this increased competition would likely lead to greater innovation and improved service quality as AT&T and Verizon are spurred to invest more in their respective networks. Thus, the benefits of this targeted approach–including the ability to enter into network and spectrum sharing agreements and facilitate faster deployment of next-generation networks–far outweigh the risk of any anti-competitive harm from joint arrangements between competitive nationwide carriers.”
While T-Mobile wants the FCC to consider joint bidding on a case-by-case basis. T-Mobile also argues that the FCC has long recognized that these arrangements can stimulate investment, promote competition and accelerate broadband deployments, which is important in this industry. Especially with the all important spectrum crunch. T-Mobile says that this is more important than ever after the AWS-3 Auction, where AT&T and Verizon walked home with about 91% of the value in that spectrum. The two larger carriers picked up a big chunk of the spectrum, not a good thing for competition.
There’s likely to be even more petitions for rule changes as we go through 2015 and get into 2016 when the Incentive Auction is scheduled to take place.