US market leader Verizon Wireless has expressed its dismay at bidding conditions that have been proposed for the Federal Communication Commission’s (FCC) incentive auction of 600 MHz spectrum next year. The operator’s concerns echo those laid out by…
US market leader Verizon Wireless has expressed its dismay at bidding conditions that have been proposed for the Federal Communication Commission’s (FCC) incentive auction of 600 MHz spectrum next year.
The operator’s concerns echo those laid out by AT&T which, like Verizon, has more than 100 million mobile subscribers and significant holdings of low-band airwaves.
The FCC has considered limiting the amount of spectrum the big two can bid for in the auction, and could place restrictions on winning bidders from selling their licences on the secondary market to certain buyers.
The regulator wants to reserve a certain amount of MHz in each market so that operators which don’t have significant reserves of low-band spectrum can acquire licences.
These rules would be beneficial to smaller operators Sprint Corp and T-Mobile US, which are both looking to eat into Verizon and AT&T’s subscriber bases. Verizon said in a filing that it “would be perverse and unjust for the Commission to adopt auction rules that subsidise some large multinational companies at the expense of their competitors”.
While Verizon was highly critical of the proposed rules, it did not go as far as AT&T in its filing last month.
AT&T said it would have to re-evaluate its participation in next year’s 600 MHz auction if the regulator did not change proposed restrictions on how much spectrum it would be able to buy.
The incentive auction will see spectrum transferred from broadcasters to mobile operators in a two-sided process whereby the frequencies will be acquired by the FCC, then repacked and sold on to telcos.
Verizon warned that limiting how much spectrum participants could buy would make an already complicated process even more complex. Operators will express their demand for spectrum to the FCC, which will then mediate with broadcasters.
Verizon said that restricting winning bidders’ ability to sell their 600 MHz licences in the secondary market would impact the amount of spectrum the auction would free up.
This is because “firms are less likely to participate, or to bid aggressively, if they know that they will be unable to subsequently sell their spectrum if their business plans change or do not work out”, the telco said.
Verizon argued that Sprint and T-Mobile both held significant amounts of spectrum and were well-capitalised by their foreign owners, therefore did not need preferential treatment.
It finished by adding that the FCC should adjust its spectrum screen policy, which limits how much spectrum operators can hold, so that Sprint’s frequencies in the 2.5 GHz were taken into account.
It said that since Sprint was using the band for mobile broadband it should be treated like other spectrum.
