Broad Coalition Asks FCC to Impose Aggregation Limits Before Incentive Auction

The competitors warn that without curbs on spectrum acquisitions, Verizon and AT&T are poised to buy nearly all of the low-band 600 MHz spectrum offered in the 2015 auction. “Two carriers currently control over two-thirds of critical low-frequency spectrum, and they have both the resources and the incentive to prevent competitors from gaining access to this vital resource in the upcoming incentive auction,” the competitors said (http://bit.ly/1gVxwMq). “The adoption of pro-competitive policies governing spectrum aggregation will help consumers, spur competition, stimulate investment, and accelerate wireless innovation."

Timing is critical, the competitors said. “Competitive carriers often depend on equity investment and debt issuances to finance spectrum acquisition,” they argue. “Therefore, the sooner the Commission adopts final rules in these two related proceedings, the greater certainty competitive carriers will have as they seek the substantial financing necessary to compete aggressively against the dominant carriers in the upcoming incentive auction.” The group also said the FCC’s spectrum screen should treat low-band spectrum differently than other spectrum. “Not all spectrum is created equal,” they said. “But as numerous parties to this proceeding have explained, the qualitative differences among spectrum bands do not stop at the 1 GHz band edge. A spectrum holdings policy should therefore seek to address any material variations in utility, performance, and efficiency among different bands of spectrum.”

"It is a very significant statement from a diverse group of interested parties -- both carriers and public interest groups agree on the importance of the basic fundamental principles necessary to constitute a successful auction,” CCA President Steve Berry told us. “The principles outlined in the letter really are a strong indication of intense interest from competitive carriers, and there is a lot at stake. The FCC needs participants, and it is extraordinary that everyone except for the duopoly is in accord on these broad fundamental principles. Access to low-band spectrum is essential to providing innovative high speed mobile broadband services. Transparent rules are critical, and I hope the FCC looks to the broad support of these stakeholders to accelerate broadband deployment and promote competition that benefits consumers."

An AT&T spokesman referred us to a December blog post by AT&T Vice President Joan Marsh, in which she rebuked earlier arguments made by CCA on low-band spectrum (http://bit.ly/1iZzLDB). Marsh said many small carriers have obtained or have access to low-band spectrum through auction, secondary market purchases or long-term lease. Others bought but then sold low-band licenses, and many of AT&T’s licenses were bought on the secondary market, Marsh said.

"I'm skeptical of the FCC imposing ex ante spectrum aggregation limits in advance of auctions in the interest of achieving someone’s supposed notion of ‘fair’ competition,” said Randolph May, president of the Free State Foundation. “Obviously, this notion is in tension with one of the primary objectives of auctions -- putting the spectrum in the hands of those who think they can put it to the highest, most valuable use. And I am especially skeptical of suggestions that the commission should somehow differentiate between low-band and high-band spectrum. Depending on the particular company, its own circumstances, the timing of an auction, its future plans and the plans of others, and so forth, some frequencies might be more ‘valuable’ at any one time in one band or another.”