Dish, Clearwire Spectrum Added to FCC Screen in Proposal Before Commissioners
The FCC will seek comment on the proper market-by-market “trigger point” for the TV incentive auction, after which the FCC will limit bidding by carriers that already have lots of low-band spectrum, an FCC senior official said Friday. FCC Chairman Tom Wheeler circulated a draft of the rules Thursday for a vote at the FCC’s May 15 meeting, the official confirmed, saying the only issue on which the agency plans to seek further comment is the trigger point.
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The FCC proposal also adds most Broadband Radio Service/Educational Broadband Service spectrum to the overall spectrum screen, the official said. Sprint holds most of that spectrum. The FCC removes the 10 MHz D-block from the screen, since it’s being allocated to public safety, as well as some Specialized Mobile Radio service spectrum, the official said. The H-block spectrum and AWS-4 spectrum, both owned by Dish Network, also are being added to the screen, for a net add of about 128 MHz, the official said.
The rules propose a restriction on selling 600 MHz spectrum on the secondary market for six years if that spectrum would go to a provider that otherwise was not allowed to bid in a certain market. Both AT&T and Verizon have been active in the secondary market for 700 MHz spectrum since the 2008 auction. T-Mobile this year picked up 700 MHz spectrum, also through the secondary market. The restrictions apply to carriers with more than one-third of the low-band spectrum in a market. U.S. Cellular said last week it could face restrictions in some markets as a result of the screen (CD April 25 p18).
In a Friday blog post, Wheeler explained the rationale for the trigger. “When the auction reaches a ’trigger’ point that the Commission will set in advance of the auction -- largely based on meeting a price threshold -- wireless providers with a dominant low-band position in a license area will be constrained from bidding on a few ‘reserved’ spectrum blocks,” he said (http://fcc.us/1hxAIyH). “The exact amount of ‘reserved’ spectrum available will depend on how much spectrum non-dominant providers are actively bidding for at the trigger point, but in no instance will the reserve exceed 30 megahertz."
Without calling them out by name, Wheeler once again singled out Verizon and AT&T as holding most low-band spectrum. The FCC official noted that Verizon and AT&T control almost two-thirds of low-band spectrum. “Two national carriers control the vast majority of that low-band spectrum,” Wheeler said in the post. “This disparity makes it difficult for rural consumers to have access to the competition and choice that would be available if more wireless competitors also had access to low-band spectrum. It also creates challenges for consumers in urban environments who sometimes have difficulty using their mobile phones at home or in their offices."
Wheeler reiterated that low-band spectrum is special (CD April 21 p1). “The low-band spectrum we will auction is particularly valuable because it has physical properties that increase the reach of mobile networks over long distances at far less cost than spectrum above 1 GHz,” he said. “It also reaches deep into buildings and urban canyons."
BTIG analyst Walter Piecyk said in a blog post the revised spectrum screen has bigger implications. “It’s not good news for Sprint, which is interested in buying T-Mobile, but is great news for Dish, which could be a target of Verizon or AT&T,” Piecyk wrote. “The key swing factor in the change was the decision to include most of the 2.5 GHz spectrum that Sprint bought from Clearwire, which effectively brings Sprint right up to their allowable spectrum ownership based on what they control today.”