Sprint Assault Over Spectrum Concentration Enlivens California Debate on T-Mobile Sale
SAN FRANCISCO -- A Sprint executive laid into AT&T as seeking to dominate spectrum holdings and thereby the wireless market, rousing an otherwise staid three-round California Public Utilities Commission (PUC) debate about the T-Mobile deal (CD July 11 p5). Administrative Law Judge Jessica Hecht repeatedly scolded Sprint’s director of spectrum proceedings, Trey Hanbury, on behalf of executives from the deal parties that he appeared with late Friday.
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In contrast to other speakers at the first of three technical workshops that the commission has scheduled for this month in a review of the purchase, Hanbury was so assertive that at one point he caught himself grabbing a question by a Sprint consultant in the audience directed to William Hogg, AT&T’s senior vice president of network planning and engineering. The tag-team argument -- with Andrew Merson, Cricket’s engineering vice president helping Hanbury against Hogg and Peter Ewens, T-Mobile’s chief strategy officer -- was lively but never heated.
The lead commissioner on the inquiry, Catherine Sandoval, expressed concern about the prospect of AT&T holding most of the spectrum in California markets. Hogg replied that after the acquisition the carrier wouldn’t be far ahead of Verizon Wireless and the combined portfolios of Sprint and the affiliated Clearwire in sprectrum suited to broadband. In response to other questions from Sandoval, he said it’s a “very rare instance” when AT&T takes a tower out of commission for redundancy after an acquisition, and he promised that every place in the carrier’s California service territory will have LTE available within six years after the T-Mobile purchase closes.
AT&T has considerably more unused spectrum, including its AWS frequencies, than “spectrum constrained” T-Mobile does, undercutting capacity justifications for the purchase, Hanbury said. The efficiencies the buyer points to are “false, exagerrated or premised on a number of fictions,” he said. AT&T has so little interest in the AWS spectrum that significant blocks are included in the breakup fee that the carrier has agreed to with T-Mobile, Merson said. Ewens declined to comment on grounds of confidentiality.
Hogg insisted that the deal would bring “tremendous capacity gains” from splitting cell sites, “free up spectrum for other uses” through elimination of a “redundant control channel,” and provide “utilization efficiencies.” Under questioning by Merson, he said AT&T plans to use its AWS holdings to varying degrees by market, but it will take time for leasing and zoning of towers converted to use that spectrum along with the 700 MHz and for handsets that support both to be developed. When a PUC staffer asked Hogg how second-tier carriers will compete with AT&T to acquire new spectrum, he said, “The market will determine who those winners will be."
A Silicon Valley workshop scheduled for Friday in Santa Clara is to take up innovation issues, including handsets, distributed antenna systems, broadband and data transfer. The last in the series, July 22 in Los Angeles, is to cover customer issues including price, service quality, customer service, coverage and disclosure. The two commissioners at the first workshop told us that the PUC has authority to go beyond stating conclusions of its inquiry, including in comments to the FCC, and take more substantive action concerning the deal if it sees fit.