FCC’s new proposal will put a stop to any Sprint, T-Mobile spectrum-acquiring joint venture

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Not long ago it was reported that T-Mobile and Sprint were looking to form a joint venture in order to gain as much spectrum as they could in next year’s major spectrum auction. The plan was, allegedly, that the two would raise $10 billion to ensure they walked away from the 600MHz auction with as much spectrum as possible. Turns out, the FCC has other ideas.

Tom Wheeler, FCC Chairman (pictured above), circulated new rules today, proposing that that the regulatory body bans all four nationwide carriers from teaming up to bid at the auction.

FCC Wireless Bureau Chief, Roger Sherman stated:

“If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition. Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed.”

The commission still needs to vote in order to make the adjustments to the auction rules, but it’s not likely that these changes will face much opposition within the FCC.  And although it doesn’t mention a merger between T-Mobile and Sprint specifically, it would perhaps hint at the commission’s attitude towards any kind of joining together of two major network operators.

And – of course – this isn’t the first time the FCC has changed the auction rules. Earlier in the year it pushed through changes which would help promote competition between smaller carriers and hinder spectrum-hoarding by the two big players in the market.

Source: WSJ, FCC

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  • zombie

    Bullcrap, when the fact is ATT and verizon alone can afford 2x what the joint venture can come up in cash.

    • Fritz

      which is why AT&T and Verizon are limited in how much they can buy…

      • Mike Palomba

        I beleive that rule was changed recently but I might be wrong

    • GinaDee

      Sorry. T-Mobile needs to compete in ways that don’t involve handouts and government welfare. They are a business. If they want to compete they can take out loans and buy as much spectrum as they need.

      • S. Ali

        > handouts and government welfare.

        Sorry. Perhaps you’ve been misinformed, but ATT and Verizon were given handouts in the form of valuable spectrum (850mhz) many years ago. They were also both given billions in tax breaks to lay down fiber networks (which they didn’t do) that supply these towers. Perhaps they should give it back and take out a loan and buy it back from the tax payers of this country? Fair and all right?

        • GinaDee

          Nope life isn’t fair.

          By your own admission T-Mobile apparently needs to make friends in Congress.

        • Mike Palomba

          Your obviously Anti-T-Mobile so why are you on this site anyway? Go find the verizon or Att forum and rave about how amazing they are there

        • wsj

          So one of the Mod’s is anti T-Mobile? Because you don’t agree with what she says. Sorry, if T-Mobile does not understand campaign contributions (not bribery) perhaps, they should hire someone who does.

        • Mike Palomba

          She’s saying bribery is the way to go, “make friends in congress” and she’s saying tmobile needs to learn something. Let me tell you the other carriers have a lot more to learn then T-Mobile. They’re doing most of what they do right

        • S. Ali

          I don’t understand what you mean? Are you suggesting T-Mobile bribe Congressman, something that is illegal and carries with it a prison sentence? Or are you suggesting that ATT/VZW have done so in the past (please provide evidence).

          Please clarify: You are against handouts, but ok when ATT gets them. You don’t want TMO to get handouts, but they should bribe legislators to get them? Am I understanding you correctly?

          Life ain’t fair, but the laws of this country meant to be.

          BTW: The internet you are using right now to express your opinions….was invented by a government handout.

  • Fight for Freedom

    In other words, only the Oligopolies WE as the FCC approve of may do such a thing.

    Freakin asshats.

  • Willie D

    If you wanna make money you gotta invest. Thinking ahead and pushing billions toward spectrum now, for tomorrow is smarter than attempting to buy what only they think they need short term. You either wanna compete and are willing to scrimp and save today, or you aren’t. Merging networks is fine but no more spectrum swaps.

  • http://rosarynovice.stblogs.com/ Augustine

    - “Halo, Iliad?”
    - “Oui.”
    - “Zis iz Deutsche Telekom.”
    - “Sacre bl…”
    - “About zat offah…”
    - “M…”
    - “Iz it still gut?”

    • pbxtech

      Nien.

      Zat offah… Is kaput! Yah.

  • Jeremiah McCurry

    Great idea, FCC. Let’s just give all the 600 spectrum to the Big 2 to go with most of the 700 they won.

    • Chreez

      I thought the big two were limited on how much they could purchase? I don’t think this will hurt T-mobile nearly as bad as anyone thinks, and frankly, Sprint can’t afford as much as T-mobile will at the time of the auction. Sprint will drop to #4 well before then.

      • NYC33

        You are simple delusional about sprint not affording it. It is softbank the parent company that will buy that spectrum. Tell me if the Germans will throw 10 billions for a 10×10 600mhz.

        • UMA_Fan

          It doesn’t have to be the Germans anymore. Tmobile as a public company has its own financial access to borrow the billions needed. At the rate they are performing it should be no problem. Once they get low band spectrum it’s game over for Verizon and att.

        • Ashton3002

          Not really even then they have a way to go..

        • kalel33

          They already have spectrum that gives them the ability to actually have nationwide coverage, not just metro coverage, but the problem is towers. They don’t have towers in a majority of the US. Great to have spectrum but if you don’t have the towers then it’s all for naught. If they did build out the coverage of AT&T and Verizon then rates would go up.

        • UMA_Fan

          They operate more towers than verizon. This is why speeds are so fast and capacity is greater and primed for more data use on tmobile. In urban areas if tmobile didn’t have more towers than Verizon there would be big gaps of no signal of any sort in many urban areas.

          When you’re in the boonies its not like Verizon has the area surrounded with cell towers. They throw up a tower or two and its the low band spectrum that does the work travelling all that distance.

        • kalel33

          I used to work for Verizon and it’s more than a tower or two in the rural areas. They have them every 5-10 miles in flat areas and closer in terrain that is changing. Like I said, T-mobile has metro areas covered but it’s not just the “boonies” that T-mobile doesn’t cover.

          Where I’m from, Colorado, they don’t even have coverage on quite a bit of the interstate, let alone the decent sized tourist cities and forget about Kansas, Nebraska, Oklahoma, and New Mexico, where they mostly rely on roaming partners. Verizon and AT&T have those places covered because they have a ton of towers in those areas. T-mobile will never compete against AT&T and Verizon for businesses and government accounts, which are the big money makers, until they build out their towers beyond metro areas. They also need to roll back the data roaming to unlimited, like they used to.

          For people that travel quite a bit, they will go with the big 2. For people that travel once in a blue moon then it’s worth the savings to have poor signal and have your internet cut off because you’ve played Pandora for 50 minutes while roaming on that rare excursion.

        • bucdenny

          Who will loan another 10 billion when you have 20 billion in debt? You cannot simply just get a loan… “it should be no problem” We are talking about 10 billion dollars!! Your living in a fantasy world thinking like that sir.

        • Jay J. Blanco

          If Verizon can borrow the billions to buy shares back I’m pretty sure tmobile can also

        • bucdenny

          They have the customer base and the billions in profits per quarter to back it up. T-Mobile hasn’t made billions to have such a credit line.

        • UMA_Fan

          Most companies carry debt. Tmobile is a proven healthy company. They have ALL the industry growth right now.

    • monkeybutts

      The FCC said they would reserve something like 30% that excludes AT&T and Verizon. AT&T and Verizon lobbied against it.

      • Jeremiah McCurry

        So they’ll buy 70% of it. TMO and Sprint will have to fight USCC and all of the regional carriers to get a decent slice of the remaining 30%.

        • Stefan Naumowicz

          30% is plenty since they have less than that in combined market share, and it wouldn’t be their main spectrum like it is for att/vzw its only backup when PCS/AWS is unavailable.

        • DirkDigg1er

          30% divided amongst all other US carriers is not enough considering that this is the last low band spectrum auction for the foreseeable future.

  • randian

    Sounds like AT&T and Verizon have whispered in somebody’s ear.

  • vinnyjr

    The two big Carriers are pissed at what T-Mobile has accomplished in a short time. They hate the way T-Mobile has completely changed the Mobile Industry. I have been a T-Mobile customer going on 10 years. Needless to say I get very strong data speeds both on HSPA+ and LTE. My speeds are so strong on the HSPA+ frequency I rarely even use LTE. Thank You T-Mobile.

    • Stefan Naumowicz

      So you manually turn off your LTE because hspa is just fine for you? Yeah ok

      • sushimane

        From the last time I was in Boston hspa+ signal is strong when I did a speed test on LTE and hspa+ there wasn’t much of a difference.

        • Jay J. Blanco

          Same here in Columbia, SC. No difference at all. But hspa pentrates way better and signal is way more consistent

        • sushimane

          Yeah that’s true.

        • Jay J. Blanco

          5x5mhz lte sucks. But at least we got it

        • sushimane

          Yeah just gotta be happy. Lol or u can just move to Greenville. I think Greenville is 10×10 I’m usually getting at least 35-38 down and 25 up

      • vrm

        lte is a battery hog, compared to hspa. they don’t tell you that. I turn LTE off and I am still alive and well.

      • Lawyer

        I turned off LTE since I got my Z10 because it drains your battery. I only have business in my Z10 (is not a toy to stream and post crap etc..) it works very well let me tell you! Granted indoor coverage keeps being Tmobile main problem that is keeping me thinking on AT&T but haven’t changed yet!

    • Richard Yarrell

      Tmobile has pissed on Verizon and At&t so much it’s comical. The last thing they need is Sprint.

      • calvin200

        Except for a company that actually wants to own them.

  • Nearmsp

    This is a warning shot from FCC Chairman, that no collusion between the 4 major wireless providers. There is 0 chance that Sprint can buy T-mobile. Legere can continue to drop hints on CNBC that “scale is the growth strategy”. Guess what sink or swim on your own. With 40 million customers if you still want scale, time to go for a walk and let some smarter CEO take the reigns. Duetsche Telecom missed an opportunity to negotiate with Iliad. Same with Dish Network. It is essential that 4 major providers must be maintained. FCC should come out with a 4 pillars policy like Australia did for the banking sector.

    • Wilfredo Martinez

      If SoftBank continues to insist with such merger he might as well give T-Mobile the break-up fee now, because from what I see, it is clear that it is vital for the us market to have 4 competitors or more in the wireless industry. The wireless industry is too far consolidated already!

    • donnybee

      First off, they have 50 million customers. But that’s beside the point.

      The thing to remember is that Sprint is going to die. Whether they get bought, or their terrible leadership digs the grave, they’re dying. We all know what will eventually happen to them.. Meanwhile the big carriers are sitting pretty knowing that if a customer leaves their service, there will be many times that customer will face no-service zones if they go with Sprint or T-Mo. Yes, T-Mo works very well, but many more people want to not have to wonder if they have service when they pull their phone out if their pocket.

      So dialing in further – Verizon and AT&T both have had time to buy a lot of spectrum, a lot of regional carriers, and will be bidding in the next auction.
      Now, remember how Sprint is dying? If they die from market loss, they will be divulged and parts sold to the highest bidder, aside from territory areas that will provide a carrier with monopoly control. So who will be the highest bidder? I can guarantee that Verizon and AT&T both are hoping the ‘deal’ with T-Mo falls through, because they know that one day Sprint is done for on it’s own and they have plenty of cash waiting.

      As long as a carrier has competition, it’s not controlled by laws preventing a monopoly. So what will happen? Duopoly. Goodbye to the industry changer that is T-Mobile and who knows what will happen..

      Obviously these things could change and I doubt they will all happen in that order, but maybe everyone should think about what could happen if Sprint dies without merging with T-Mobile and shares it’s resources with all carriers rather than merging them with mostly the number 4 carrier. Hmmm

      • Nearmsp

        Dial back and reflect what AT&T said when they wanted to buy T-Mobile, that they would die. No one dies. At the right price some one will snoop in and buy Sprint. In a market economy, it is not the role of government to pick winners and losers. Did Chrysler die? Fiat got it free. Ford was not allowed to buy it. When Sprint stock goes down more, a buyer will emerge who can buy it at a discount and run it well. 100s of companies are bought by private equity each year. They are made healthy and then equity sold. Hilton is currently majority owned by Blackock after it was taken private. Right now Iliad and Dish are buyers in waiting for T-Mobile. SoftBank overpaid for Sprint. At the right price buyers will emerge for Sprint too. Let market forces play out.

      • calvin200

        Obviously Sprint has already died and has been bought out. Failed leadership has been replaced. Who knows if it’s enough yet, but your different ballgame has already happened. Don’t keep score from the last game, it won’t help you with this one.

  • redman12

    That’s funny they could change the rule so quickly. What about Net-neutrality?

    • chris125

      This has nothing to do with net neutrality….

  • Terry

    I had hoped T-Mobile and Sprint could combine their resources and bid on this spectrum collectively but I understand the FCC’s position on this. If they allowed T-Mobile and Sprint to do this, what’s to stop Verizon and AT&T doing a joint venture to do the same thing?

    • JosephLagalla

      Pride. Though in all seriousness, the joint venture would also stop the more local carriers from being able to compete.

  • Richard Yarrell

    Guess this lets people know what will happen when the supposed Sprint -Tomible merger hits that FCC table. It’s not happening folks.

  • Erick G.

    I’m a TMUS customer, and quite happy (as a disclosure), but I don’t dismiss Sprint, like a lot of people here do. Softbank has capital, the expertise, and the desire to push Sprint to the top, sadly I can’t say the same for DT, expertise, they do have, no as much capital as Softbank, and definitely none of the desire. Softbank hasn’t done much for Sprint other than give them money to continue with the network upgrades plans, and obviously the focus is on acquiring TMUS, I believe that once they realize that the merger it’s not happening, they will turn their focus into surviving on their own, and I’m afraid that TMUS will be the main victim of it, just like Sprint now it’s the one most affected by what TMUS it’s doing.

  • Baxter DeBerry

    Well this is actually a good thing really.. If you look at it in a certain way, if AT&T and Verizon teamed up against Sprint and T-Mobile they wouldn’t have a chance… FCC I believe really in some ways wants some of the spectrum to go to T-Mobile and sprint to some degree.. I dont see this as a hint against a merger I see it in a different view

    • yankeesusa

      That’s a great point. So instead of allowing this to happen and then having verizon and att doing the same thing they are leveling the playing field to a certain degree. I hope both sprint and tmobile are able to get a good chunk of the spectrum. It’s good for all consumers if that happens.

    • calvin200

      I’m not wanting that, but Verizon and ATT have been excludes in many markets so…

  • yankeesusa

    Well, even if this doesn’t happen it looks like tmobile is doing what they can to continue expanding and improving their network. With nationwide volte and 2g conversion to LTE and expansion of some of their metro areas it’s good to see them doing this. I can’t wait till they start using 700mhz band. Maybe the Galaxy Note 4 will be compatible with 700mhz.

  • DirkDigg1er

    Is it me or does Tom Wheeler look like Skeletor.