John Legere: AWS-3 spectrum auction a “disaster for American wireless customers”

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It’s been a few weeks now since the government’s AWS-3 spectrum auction ended, and by all accounts, T-Mobile played its cards perfectly. It spent almost $1.8 billion on mid-range spectrum which it can use to bolster its already-strong portfolio of 1700/2100 airwaves. But all-in-all, the whole affair was a big pile of baloney according to T-Mobile’s outspoken CEO.

In a blog post published a short time ago, Legere describes the auction as a “disaster for American wireless customers.”

If you’ve been following the auction since it kicked off at the end of last year, you’ll know that overall spending on spectrum broke records, and far exceeded the wildest predictions. The top three companies spend $42 billion between them. Those companies: Dish, Verizon and AT&T. Added together, the three scooped 94% of the available spectrum. And this fact should scare you, according to Legere.

It’s not that T-Mobile did badly in the AWS-3 spectrum auction. But, there’s another auction coming up in 2016 for low-band 600MHz spectrum. And if this auction goes anything like the AWS-3 one, it’s the “consumer that will pay the price. Again.”

“AT&T and Verizon already control 73 percent of the nation’s low-band spectrum. Yes. I said 73%! Wondering how the hell this happened? Back in the ‘80s, before the government started auctioning spectrum, it gave Ma Bell’s offspring a ridiculous amount of free spectrum to begin building wireless networks. Each company got a juicy 25 MHz of prime, low-band spectrum across the country. And these Twin Bells, infused with this government gift, have leveraged it into market dominance. Yes, they are now AT&T and Verizon! And they now have two-thirds of the nation’s wireless customers, and nearly $162 billion in annual wireless revenue between them.”

In order for the next auction to be more consumer friendly, T-Mobile’s chief wants three things from the U.S. government:

  1. Reject the Big Two carriers’ attempts to delay the next auction “to restock their coffers.” VZW and ATT have enough spectrum already, they don’t need to purchase tons more. They’ll just use the extra cash to kill competition and make the duopoly even stronger.
  2. Change the auction rules by reserving 40MHz, or half the available spectrum for the competition. It’s not a hand-out, it’s making a level playing field.
  3. Change the rules so that only spectrum can only be purchased by companies who can use it, not horded and traded.

Lastly, John Legere has called you – T-Mobile fans – to act by getting in touch with the FCC to demand a “competitive, innovative future for US wireless.” You can even tweet @FCC if you like.

Whatever your thoughts on Legere’s petition, it’s clear to anyone that two companies owning the vast majority of spectrum isn’t a good thing when there should be four competitive carriers involved.

Source: T-Mobile

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  • I want #3. Use it or lose it.

    • David Thoren

      And don’t allow trading / selling it to be counted as “use”.

      • Mike

        Yeah its not fair for to buy spectrum at a goverment auction and sell it for more

  • Jay J. Blanco

    I agree completely this is ridiculous t-mobile has to pay for all they spectrum when the top 2 was given spectrum wtf. Seriously uncompetitive

  • Joe

    I agree.

  • kbiel

    How about we stop selling the spectrum and open it up for unlicensed use. Spectrum exclusivity was more important when radio communications were largely analog. Digital technologies allow for multiple, simultaneous users and uses in the same spectrum.

    • archerian

      it doesn’t work like that, radio waves haven’t changed since Marconi..

      • kbiel

        It certainly does work like that or you wouldn’t have Wifi, cordless phones, or other various personal radios. None of these things require a license from the government, though there are some rules depending on the band. They also play well together (e.g. Wifi and Bluetooth) If you doubt that this could work for mobile, then please google LTE-U.

        • archerian

          I agree with your idea, if we open up spectrum for unlicensed use, it will still be restricted by power and interference, to solve that it will still need some kind of oversight. As your example, Wifi and Bluetooth work well together as their power and frequency bands have been legally defined to not interfere, diff frequency being the case here.

        • Kogashuko

          Simple solution. Assign the spectrum in the area based on use and subscribers. It could be reviewed quarterly. It should never have been auctioned off as a mechanism to pay welfare or the national debt.

        • kbiel

          Actually, Bluetooth and Wifi work well together because they had to and their respective standards groups designed it that way. 5GHz is even more wild west, though less crowded at the moment, and mobile equipment manufacturers are experimenting with using it to boost LTE speeds.

          In other words, with the advent to digital technologies and protocols we will need less government oversight as manufactures and standards organizations will do the job better.

  • Mirad77

    That is the problem with capitalism.

    • Acdc1a

      The wireless system in the US is crony capitalism where government picked winners years ago. Don’t confuse it with real capitalism.

      • Mirad77

        You called it crony then add capitalism after it. Nice try.

  • UMA_Fan

    Everyone should do this whether you use T-Mobile or not. A stronger Tmobile leads to a better industry for everyone.

    • nycplayboy78

      Agreed

    • Kogashuko

      Definitely. Just like if dish would actually build out their spectrum.

    • TK – Indy

      You don’t get it. The spectrum and the service it produces would still end up costing what the market will pay. This wouldn’t change anything, except how much money DT gets for T-mobile when they sell it.

      • UMA_Fan

        If DT was out to sell they wouldn’t have just thrown a billion dollars away at the AWS auction. An auction by the way around spectrum Tmobile already has a surplus of.

        It’s you that really doesn’t get it though. The service we are charged right now in the market is in no way related to the cost required to provide service.

        T-Mobile giving away international roaming is proof of that. T-Mobile doesn’t LOSE money by doing that. It’s Verizon and AT&T who has fooled people into thinking it’s charging more because of some cost they have to burden. The truth is they have an advantage with low band spectrum for reach but quality wise they are behind Tmobile in many ways like VoLTE for example.

        • Brian Miller

          A billion in the spectrum auction is small potatoes. Dish spent $13 billion and is a smaller company.

          If T-Mobile USA wants to compete in the big leagues in US wireless, it should invest in spectrum like other competitors (including smaller ones) are already doing. It shouldn’t get free or below-market-price spectrum from the government.

    • Mr Paul

      A stronger Sprint and Sprint’s comeback is far more crucial to the industry. Especially being that Sprint HAS low-band and HAS spectrum. Not a city carrier that likes to flip flop between ego and victim.

      • Mike Palomba

        All of Sprints “deals” have to many strings attached and fine print. If they want to make a comeback they need to do what T-Mobile did and make the customer like them. Good deals don’t mean much when your provider will nickel and dime you for ever drop of money you have

      • Hector Arteaga

        I’m a fan of Sprint, but Sprint’s network is still very weak in METRO areas. You know, those places where most of us live. Maybe that can change, but T-Mobile has had a much more competent management and I believe that they would put low band spectrum to better use. I mean, Sprint already has low band spectrum and I still couldn’t get indoor signal anywhere just a few months ago. So… I’d like to see them both succeed.

    • Mike Palomba

      I agree

  • archerian

    “Back in the ‘80s, before the government started auctioning spectrum,
    it gave Ma Bell’s offspring a ridiculous amount of free spectrum to
    begin building wireless networks” .. back when I used to work for ATT along with Mike Sievert.

    • gmo8492

      So who cares…

    • yeah right

      he wasn’t a shot caller then,

      • Android_God

        LOL!!!! I bet his bank account and his career path BENEFITED GREATLY from this!!! Go ahead and justify it however you want though.

        • Mr Paul

          Seriously. You don’t hear T-Sheep saying anything about Legere’s ridiculous salary and how he’ll make out if and presumably when T-Mobile US is sold.

        • ForFairness

          The only sheep I see are iSheep.

    • Kogashuko

      I actually think they should still give out the spectrum. I think he would probably agree. He isnt saying it shouldnt have happened he is saying that the current auction strategy is jacked up. Nothing is going to happen after ATT purchased 18billion worth of spectrum other than consumer prices are going to go up.

      • TK – Indy

        The spectrum would then just revert to crazy values after it was given away, to be sold at a private windfall profit and not change your bill one iota. It would still end up costing the same for spectrum.

    • Acdc1a

      The spectrum is government (you and me) owned and controlled as well as finite. It should be free to providers who will deploy it and distributed equally to bring more competition to market. You can’t have a “free market” with a finite resource that is sold to the highest bidder.

      • TK – Indy

        That is very close to the exact definition of a free market. In a free market, there is no such thing as “leveling the playing field so I can get in on the good stuff cheap.”

        • Fabian Cortez

          The problem with your argument is that spectrum is a finite “resource” which is controlled by the government.

  • Aurizen

    So what has he been going to congress for these past few weeks? These companies like AT&T and Verizon purchased company-like values worth of spectrum!!!

  • Ashton3002

    If I’m not mistaken the spectrum that runs AT&T and Verizons network LTE network. They actually bought and invested in while Tmobile decided to buy Other Spectrum instead. So I don’t understand why they are crying. They don’t cry when they claim to have the superior network. John doesn’t cry when he’s on Twitter being an ass. This is the exact reason I don’t have sympathy for Tmobile as far as their LTE coverage goes. Don’t try and boast a better network and then cry about not being able to compete with the Big 2 and their networks.

    • Terry

      And wasn’t it in a recent comment by T-mobile, that they had plenty of spectrum to run their network? I could be mistaken, but if that is the case, then why cry now. Can’t have your cake and eat it too.

      • gmo8492

        What they don’t have much of is lowband spectrum to reach longer distances (rural areas) and to penetrate through buildings. John Legere pointing out that they’re hoarding this spectrum to shutout the competition despite the fact that the bigger carriers don’t necessarily need it. Both of you guys are full of it.

        • Ashton3002

          and back to my point in the beginning. The BIg 2 chose to buy low band spectrum Tmobile didnt. Whose fault is that? Nobody but theirs. They wanted other spectrum. So don’t cry and say it’s not fair because it was fair. It’s an auction that Tmobile decided not to participate in. I understand they don’t have low band spectrum and I inderstsnd why they want more but being that legere has the smart ass mouth he does and likes to boast a better network but begs for spectrum. it’s like saying we have better network but we can’t compete because we need spectrum. it doesn’t work that way. Sorry

        • gmo8492

          You’re one of the guys who wishes standard oil was still one big company.

        • Ashton3002

          No. not really. I want there to be all equal carriers as I want sprint to compete as well. But legeres smart ass mouth is why I feel like I do.

        • gmo8492

          Agreed, he needs to back off a little.

        • Kogashuko

          I really think he is right. I think Tmobile got exactly what they wanted with the auction. I can also see them being a little pissed when sprint and tmobile could have merged and actually competed. Instead the feds said no and then fixed the auction so that a lot of the spectrum was out of their reach.

        • Kogashuko

          They didnt buy it, it was given to them. That is the difference. The feds could easily split 600mhz up 4 ways and give it out. The process was never designed for the federal government to turn a profit. It is licensing and generally when you get a license for something the price is consistent.

        • Ashton3002

          Wrong answer. Their initial network that their voice network sits on was given to them. But their LTE network which is band 17 on AT&T and idk what it is for Verizon. They bought in an auction and invested in it and deployed it. And I feel like all carriers should have gotten some of that spectrum back then for their initial network. Their LTE networks are a different story. Every company could have participated in the 700 MHz auction. AT&T and Verizon did. Tmobile didnt.

        • It’s band 13 for Verizon, if you wanna know.

        • Ashton3002

          Wrong. It wasn’t given to them. Like I said above look up Auction 73 and you’ll get your answers. That’s the difference in me and you. I have factual evidence that proves they bought the spectrum that their LTE networks run on. You…..not so much.

        • Brian Miller

          Sorry, but this is a lame excuse. Sprint didn’t have its low-band spectrum “given to them,” yet they’ve managed to acquire it. TMUS is stuck because it has tried to operate its network on a high-frequency basis, and as a cash cow for the parent company.

          If Dish can cough up $13 billion to buy spectrum as the second-largest bidder in the recent auction, the larger and more profitable TMUS can do the same.

    • Mr Paul

      Yep. T-Mobile wants free handouts and the FCC to cater to them and give them special minority “poor victimized red magenta-headed step child” status. They want to boast about having a great network, yet cry about needing more given to them because the evil duopolists have too much.

      It doesn’t matter how sleazy, greedy, or whatever one thinks VZW and AT&T are. They both bought the spectrum for LTE, and they both deployed it. People act like AT&T and Verizon were always this way. There was a point in time when both networks, AT&T especially, lagged far behind in many areas.

      If Verizon and AT&T can do it, so can anyone else who has the same competent network management and basic ability to allocate resources and finances effectively.

      • UMA_Fan

        No verizon and att received the free handouts.

        They got FREE low band spectrum

        • Mr Paul

          The 700MHz was given to them for free? Is that what you’re trying to say?

        • UMA_Fan

          No their initial offerings

        • Mr Paul

          Not what I was talking about. I even specified I was talking about LTE.

        • The 700MHz was given to them for free? Is that what you’re trying to say?

          Yes. They got it for free way back in 1984, the year the feds ordered AT&T to break up what was an illegal monopoly!

      • Ashton3002

        Most of your post isn’t really called for.

        • Mr Paul

          Then quote what you’re talking about.

        • Ashton3002

          T-Mobile wants free handouts and the FCC to cater to them and give them special minority “poor victimized red magenta-headed step child” That wasn’t called for.

        • Mr Paul

          Why? Explain what is wrong with that. Legere does nothing but play victim when he isn’t trolling everyone else.

        • Ashton3002

          “poor victimized red magenta-headed step child” was a bit too much.

        • Mr Paul

          Why?

          red-headed stepchild
          A person or thing that is neglected, unwanted, or mistreated

          I actually said magenta-headed step-child, including the red being crossed out to indicate it was a play on that common saying.

      • J-Hop2o6

        “Show us on the doll where John Legere/T-Mobile touched you”

      • ForFairness

        You really like higher prices don’t you. That is what you are defending.

        • Mr Paul

          Cricket for example: 45 bucks a month for 5GB, and currently 55 bucks a month for 20GB. How is that more expensive than T-Mobile?

        • ForFairness

          Everyone knows that is slow data.

        • Mr Paul

          8 megabits? Get lost.

        • ForFairness

          Sloooooww. AT&T has you in their pocket. You are not very bright.

        • Mr Paul

          I hate having coverage. Let me pay more and get less from T-Mobile!

        • UMA_Fan

          T-Mobile will increase their coverage way before att and Verizon get more consumer friendly

        • Jose Hernandez

          Oh My God, if T-Mobile does not work for you then stick with At&T and enjoy the service you are paying for. As to why you are wasting your time here. You like AT&T, you hate T-Mobile. We get it

        • Normal speed is 25 megabits.

        • Jay J. Blanco

          Cricket is a MVNO they don’t apply to cellular infrastructure

        • Mr Paul

          You’re just pulling whatever you can out of your back end, aren’t you?

          The argument was talking about paying more. Firstly, AT&T owns Cricket, and has a better deal, be it prepaid or not. Secondly, in response to that argument, I do not pay more for my AT&T service than T-Mobile users for the same data, in fact significantly less.

        • Mike Palomba

          It’s cheaper but you don’t get all the perks, such as being able to buy high-end phones directly from your carrier, insurance, higher speeds, etc. you also are second priority if you’re on the MVNO, rather then the actual carrier

        • Mr Paul

          The argument was about price, not features. You pay more for those features, as I’d pay more for similar features on AT&T postpaid.

        • TK – Indy

          You are only second priority for data, phone calls already fall under Title II of the FCA and can’t be prioritized. Depending on the FCC outcome in a couple weeks, data might be moved under Title II as well, ending all prioritization of data.

        • Jay J. Blanco

          Everyone knows your with AT&T troll

        • TK – Indy

          When you have the losing argument, the only resort is name calling. Grow up and act your age.

        • Jay J. Blanco

          Actually you both are in a losing argument defending government handouts and anti free market attitudes.

        • TK – Indy

          We already established that the lion’s share of spectrum was paid for. You are anti-free market by asking for preference.

        • Jay J. Blanco

          We all know they paid for 700mhz. And got 800mhz for FREE.

        • Hector Arteaga

          How much do you pay for unlimited data on AT&T? I don’t mean throttled after 5gb either. I’m talking about 50GB I used last month? I pay $100 for two phones and we used 70GB between both lines. What plan on AT&T is comparable? Please enlighten me, I’d like to know.

        • Hector Arteaga

          MetroPCS (owned by T-Mobile) for example: $50 per month. Unlimited data. Seems like it’s $5 less per month and Unlimited > 20GB.

          You are making invalid comparisons. Because there is NO comparison.

        • UMA_Fan

          Yet more people choose T-Mobile.

          Why? Brand. T-Mobiles brand is worth a lot more than Cricket despite coverage.

        • UMA_Fan

          Ok why is Att operating Cricket in the first place? To compete with Tmobile!!!!

          You’re talking yourself out of your own arguments.

          The cricket plans you love so much? att created AIO to compete with metro/T-Mobile then continued under Cricket branding. None of this would have happened if T-Mobile didn’t exist and wasn’t gaining customers as fast as it has been.

          Tmobile has been adding the MOST customers. Att puts up a good front but deep down they’re terrified right now.

        • Brian Miller

          “att created AIO to compete with metro/T-Mobile then continued under Cricket branding”

          No, AT&T bought Cricket to deepen its prepaid business to compete with a number of carriers — most notably Sprint, which was by far the prepaid share leader when AT&T made its acquisition.

      • Jay J. Blanco

        Your comment is so stupid. T-Mobile don’t want a free hand out they are willing to pay for spectrum like everyone esle. They just want a equal playing field no matter how big each company is. That way competition is endured. Instead of what’s going on now.

        T-Mobile Withe mid band spectrum has to have way more towers I think since Metro got intrigrated t-mobile boost over 50K towers just for the coverage they have now.

        Everyone knows that low band don’t need such high concentration of towers to cover the same amount area.

        Be logical about your comments

        • Mr Paul

          An equal playing field? What you don’t understand is that is a euphemism for ending the free market model in favor of catering to smaller carriers. Stop regurgitating whatever Legere farts out of his mouth to help hype up his failing city carrier and please regard reality.

        • Jay J. Blanco

          And you call FCC giving AT&T and Verizon 800mhz equal? fair? And pro-free market. You gotta be kidding me.

          What John wants is nothing compared to the free market where a carrier takes a public good and rape everyone because they pretty much can. WRONG.

          Your the type of person that will adapt to a pot heating up on a open flame and is satisfied.

          What you fail to see is by having a little regulation it promotes healthy compitition. Instead of the the big having there hands wrapped around the neck of the wireless market.

          Compitition is good but when there is a unfair advantage that needs to be questioned And a simple solution.

        • Mr Paul

          What are you gonna do when DT sells T-Mobile, and Legere cashes out?

        • UMA_Fan

          Look unless you’re some kind of imbecile you WANT T-Mobile to succeed in the U.S. Marketplace because we have already seen AT&T and Verizon DRASTICALLY lower their plan prices in order to compete with T-Mobile.

          Thriving T-Mobile = good news for anyone who pays for cell phone service. Bad news for Verizon and AT&T stock/share holders and executives.

        • Brian Miller

          AIO and Cricket were both major strategic investments in prepaid driven by a myriad of competitive dynamics, of which TMUS was just one.

          Sprint’s success with Boost and Virgin, as well as the surging popularity of America Movil’s prepaid brands, were also major motivators. Both of them were becoming extremely aggressive with data and wireless pricing — in fact, Sprint’s in-house MVNO now sells an “unlimited” (throttled after 2.5 GB) plan for $35 a month.

          Plus, prepaid wireless is a great way to monetize second-tier capacity that would otherwise go unsold.

          Competition is important across the board.

        • Jay J. Blanco

          You really think after revenues jump for 4Q results DT is gonna sell even if they do they still gone be a shareholder

        • Mr Paul

          All you’re doing is letting the hype that Legere stirs up get to your head. T-Mobile could have delivered for over a decade, and they never did. Under Legere, they could have delivered outside of cities for three years in a row, now, but they haven’t.

          Knowing the latter, it is obvious that unless some magical change in direction occurs, T-Mobile has no long-term future, none. Everything that has, is, and will ever be done at T-Mobile US is by flying by the seat of their pants.

        • Jay J. Blanco

          It’s not hype it’s reality. It facts. It’s tangible. And no t-mobile couldn’t they had to wait until aws was cleared to launch 3G services.

          T-Mobile lacked good leadership including DT. DT was a shitty parent for years. They should have been fired Humm. N had a agreessive build out plan or stragegy true. But things are easier said then done if DT would have never lost hope and tried to pawn t-mobile off to AT&T which was stupid at first until the break up fee.

          You literally are a AT&T troll N need to go away. T-Mobile success really hurts you? Theit hard work trying to acquire 700mhz spectrum and expand coverage is no longer term future. That’s what people said 4 years ago and t-mobile is fine and they will be fine they just need to work on revenue and adding subscribers.

        • Mr Paul

          You cannot fire your parents, you can only grow independent enough and leave them. Works the same way for humans as it does for companies.

          T-Mobile can’t move of its parent’s house because its parents never gave them the tools to make it on their own.

          T-Mobile is a very sad story, but it doesn’t mean it can magically be turned around. That’s fairy tale.

        • Jay J. Blanco

          They could. Verizon did at a big cost. And anything is possible. The odds maybe be many but it will work out

        • Michael Perez

          Didn’t realize a free market was also free handouts as well. I am sure if all carriers started out with the same amount of resources the wireless industry would be a completely different picture however a free market mentality will reach a monopoly in which no free market rules exist. This is what the phone company became and during the split now have a faux form of what people like to call “free market”.

          The other issue here is timing and finite resources. You can’t build jack when your competitor owns a resource you need. I fail to see how you can miss this simple issue and expect T-mobile or any carrier for that matter to “catch up”.

          Does not matter how many customers and even advance ability to allocate the finances necessary you might have. The numbers say no when the final check is being written to Verizon, AT&T or Dish.

        • Hector Arteaga

          Exactly. Well said.

        • Brian Miller

          T-Mobile USA is a much larger company than Dish, with a higher cash flow, higher EBITDA, and considerably larger financial resources.

          How come tiny little Dish can successfully compete in spectrum as the #2 bidder at $13 billion, but the much larger TMUS complains that it simply can’t make any material investments to compete?

          (Hint: it’s not because TMUS can’t compete, it’s because its shareholders stand to make a LOT of money if they can net spectrum for well below market value).

          Incidentally, the fears that “AT&T and Verizon will buy all the low-band spectrum” are unfounded… in fact, Verizon has said it has no plans for more large spectrum buys after the AWS it landed.

        • Hector Arteaga

          Mr. Paul, we do live in a free market economy. However, history has shown us that it doesn’t always work like we expect it to. That’s when our government must do it’s job to protect us. John L is an idiot sometimes, but he is right on this one. Not because it will benefit his company, but because it will benefit me.

      • Durandal_1707

        If Verizon and AT&T can do it, so can anyone else who has the same competent network management and basic ability to allocate resources and finances effectively. massive stockpile of money with which to outbid all other bidders for the spectrum.

        Fixed that for you!

        Without low-band spectrum, you can’t build a network that effectively serves rural areas, no matter how much “competent network management” you have. It’s like expecting someone to host a search engine off of a laptop and saying, “Hey, if Google can do it!”

        • Stockpiles of money they STOLE from us with the promise of building national broadband, then spending that money on lobbying for laws barring municipal broadband, for example.

        • Brian Miller

          “massive stockpile of money”

          The “massive stockpile of money” comes from the sale of stock and the sale of bonds.

          T-Mobile USA is now an exchange-traded company in the USA. They could float a large share offering as well as offer large bond issues, just like Verizon and AT&T, to compete in the spectrum offerings.

          They’ve declined to do so.

        • Durandal_1707

          The point you’re missing is that without a share set aside, raising money “just like Verizon and AT&T” isn’t good enough. T-Mobile would actually have to raise *more* money than those two are able to in order to outbid them. That’s just not going to happen under any circumstances.

        • Brian Miller

          That’s the entire point of an auction, and it’s why the government makes an auction. If TMUS isn’t willing or able to raise sufficient money to compete at scale, then they don’t get the same level of scale as others.
          If Dish can do it, TMUS can do it too. They’re just trying to get the feds to rescue TMUS shareholders from dilution. That’s not a “public policy issue.”

        • Durandal_1707

          Whatever T-Mobile can do here, Verizon and AT&T can easily do more of. Each of them is far larger a company than T-Mobile with far more resources. With no spectrum set aside, VZW and ATT will gobble up nearly all of it. If the government is fine with this, then that is one thing, but if they wish for more competition in the wireless space, as they have previously indicated, then it makes sense as a “public policy issue” to distribute it amongst a greater number of carriers, because Ayn Rand’s ghost alone isn’t going to ensure that.

        • Brian Miller

          “Verizon and AT&T can easily do more of. Each of them is far larger a company than T-Mobile”

          Verizon and AT&T are also far larger than Dish, yet Dish was a very successful bidder in the recent auctions.

          Dish had revenue of $14.5 billion in 2014, while TMUS’s was about twice that. TMUS’s EBITDA in 2014 was almost $5 billion, versus just $2.8 billion for DISH. TMUS generated over a billion dollars a year more in cash flow from operations than DISH.

          Why can Dish successfully compete with AT&T and Verizon, despite being much smaller than TMUS, while TMUS demands an FCC bailout? Why should US taxpayers give up getting the best price for spectrum so that TMUS shareholders can make more money by getting spectrum below its true value?

        • Durandal_1707

          Did Dish manage to get a nationwide slice of low-band spectrum?

          VZW and ATT have little reason to care about what Dish bought in the AWS-3 auction. One, the massive amount of spectrum those two bought makes Dish’s paired spectrum look like chicken feed, and two, AWS-3 does not have strategic importance to VZW and ATT as long as they have enough for their own use (and they certainly do, after that auction), and they know it. With the 600 MHz auction, on the other hand, their monopoly on low-band spectrum is a vital advantage, and they are not going to give it up. Do ATT and VZW need more low-band spectrum? No, but regardless, whatever they can buy, they *will* buy, to keep others from getting and using it. You will not see Dish, T-Mobile, Sprint, or anyone else buy any 600 MHz spectrum that is available to the big two, because whatever they bid, the big two will bid more. It is vitally important to them to shut out any competition for low-band spectrum, and they are not going to just give up their duopoly position in that sector of the market.

        • Brian Miller

          “Did Dish manage to get a nationwide slice of low-band spectrum?”

          Dish managed to get a giant slice of mid-band.

          “the massive amount of spectrum those two bought makes Dish’s paired spectrum look like chicken feed”

          That’s incorrect. Of the three biggest bidders, only AT&T bought more spectrum. Verizon actually bought less than Dish in this most-recent bid. Little tiny much-smaller Dish was able to successfully bid but much-larger TMUS can’t (supposedly).

          “With the 600 MHz auction, on the other hand, their monopoly on low-band spectrum is a vital advantage, and they are not going to give it up.”

          This strikes me as conspiracy-mongering with no basis in fact other than an a-priori assertion. Verizon and AT&T have to price a return to shareholders and aren’t going to spend tens of billions of dollars in new debt just to hamstring a competitor, especially when other competitors like Sprint and USC already have low-band spectrum.

          There’s a reason that TMUS (and only TMUS) is calling for an FCC spectrum bailout… but it’s not “competition.” It’s the fact that Deutsche Telekom is close to its debt limits to maintain a prime-grade credit rating, and any additional debt that its majority subsidiary TMUS acquires also goes on DT’s books — threatening its prime rating.

          The Sprint merger would have “fixed” this by reducing DT’s holdings in the new company below the threshold where it is required to show earnings/losses/debt as the parent company’s own. And you wouldn’t have seen Legere making this demand as a result.

        • Durandal_1707

          Dish managed to get a giant slice of mid-band.

          Mid-band is not nearly as important, nor as rare, as low-band.

          That’s incorrect. Of the three biggest bidders, only AT&T bought more spectrum. Verizon actually bought less than Dish in this most-recent bid.

          Verizon bought exactly as much as they needed. Look at this map. They have 40 MHz or more in almost every single market.

          http://www.fiercewireless.com/story/verizon-aws-3-we-have-least-40-mhz-aws-spectrum-92-top-100-markets/2015-02-17

          Little tiny much-smaller Dish was able to successfully bid but much-larger TMUS can’t (supposedly).

          T-Mobile can get AWS, and they have, long ago. Mid-band spectrum is not the issue here.

          Also, don’t forget that both Dish and Sprint have also lobbied the government for a set-aside portion, not just T-Mobile.

          Verizon and AT&T have to price a return to shareholders and aren’t going to spend tens of billions of dollars in new debt just to hamstring a competitor,

          Verizon’s entire business model is predicated on charging high prices on the strength of having more filled-out coverage maps than everybody else. Their low-band spectrum holdings are what allow them to have that advantage. Giving that up would be a huge business blunder, and they know it.

          Besides, VZW and ATT do this already. How much spectrum that they bought years ago is still unused?

          especially when other competitors like Sprint and USC already have low-band spectrum.

          US Cellular’s 700 MHz holdings are far from even being close to nationwide. The stuff Sprint got from Nextel is closer (although disadvantaged by being in a weird band that no one else is using and which few phones are likely to support), but still has significant gaps. The only carrier with truly nationwide low-band spectrum is, of course, Verizon. And they like it that way.

        • UMA_Fan

          There’s was no point in doing that for a mid band spectrum auction which they already have plenty of. We will see what they do for the 600mhz auction which they badly need.

        • Brian Miller

          And for which, Legere is demanding that the government put a finger on the scale, to tilt it in TMUS’s favor.

        • TK – Indy

          They issued $3 billion in corporate bonds last year. They had to use most of it for operations because Legere’s business model can’t make any money. This is poor leadership, and a bailout of cheap spectrum will only propagate it.

        • Brian Miller

          They could easily float $15 billion or more to buy spectrum. Dish did it and Dish isn’t even making money from its spectrum holdings.

        • socalrailroader

          Actually, you can, AT&T affiliate Edge Wireless did it with only PCS here in NorCal, and in Oregon, Southeastern Idaho and Wyoming, all very rural areas. AT&T merged Edge Wireless into their network in 2008.

        • Durandal_1707

          I’d like to you see you try that in a place like, say, North Dakota.

        • socalrailroader

          North Dakota would be far easier, flat and with little to no forest cover. Those areas I Iisted are some of the hardest to cover in the US due to the rugged terrain and heavy forest cover. Take my very rural County of Mendocino here in Northwestern California, it’s very rugged, heavily forested and has Redwoods that reach close to 400 feet high, it’s one of the hardest areas to cover in the country, North Dakota is a cakewalk compared to areas like ours.

        • Durandal_1707

          However, there is very little population to justify the expense of putting up all the PCS towers needed to cover the huge land area.

    • UMA_Fan

      No. Read the whole post. Verizon and Att got their low band spectrum for free.

      • Ashton3002

        No. Read what I said. They participated in an AUCTION and won what their robust LTE networks sit on at the moment. Look up Auction 73. You’ll get the answer.

        • Jay J. Blanco

          Read about 800mhz spectrum you’ll see what John is talking about.

        • Ashton3002

          I know what he is talkig about. And like my original point said. As far as their LTE note work goes.

      • And that was in 1984, the year I was born, when they got that spectrum!

        • socalrailroader

          Baby Lol I came along before cell phones, in 1971.

      • Brian Miller

        T-Mobile in Germany also got its low-band spectrum for free from the German government, which gave it the revenue to build out its US operations. Not exactly the strongest platform from which to complain about the legacy telcos.

        • UMA_Fan

          I don’t see the point. Voicestream wireless (which DT purchased and rebranded T-Mobile USA) would more or less become what Tmobile US is in the marketplace today with obvious minor changes.

        • Brian Miller

          T-Mobile USA, as a wholly-owned subsidiary of DT for most of the last ten years, had plenty of access to capital.
          I’d guess that they don’t want to aggressively issue new shares and bonds because that would dilute the share price for TMUS shareholders. But the profits of TMUS shareholders are not a public policy issue. If Dish can raise money to bid, so can TMUS… a government bailout choosing winners and losers is not appropriate.

    • Jay J. Blanco

      John is talking about 800mhz Spectrum not 700mjz spectrum everyone should know that. But apparently you dont. and They were given 800mhz spectrum.

      And t-mobile has the right to bitch. Because they were no auction rules on 700mhz AT&T and Verizon got a big advantage to gobble it all up. Which is not good for competiton

      • TK – Indy

        In order for there to be companies with lower prices, there must also be companies with lesser service.

        • Jay J. Blanco

          Not true at all. I’m going to put this in analysis. McDonald’s and Burger King essential have the same number of restaurants and they have similar prices. They have a healthy competition going on because they both have loyal customers. The same would be for Wireless carrier market

        • TK – Indy

          You need to take Economics 201 and 202 to understand what a foolish statement that is. The industries aren’t remotely similar.

        • Jay J. Blanco

          You need to take a research class to understand what I was saying. I’m not comparing the two at all

        • TK – Indy

          If they were the same, they would cost the same – which is what the market is willing to pay. I prefer BK, but now that it is Lent, I am at McD’s for the fish sandwich sale.

        • Jay J. Blanco

          Not true in every instance if 4 carriers have the same coverage they would not cost the same because they would be competing for customers. Look at Europe as a prime example

        • TK – Indy

          Look at gas stations. You have to have gas, it doesn’t matter from where. All the stations have the same price.

        • Jay J. Blanco

          actually they dont, California Vs. SC. SC has cheaper prices.

        • TK – Indy

          Apples and oranges, and you know it. California emission rules call for a higher priced gas, and state taxes vary widely.

        • Jose Hernandez

          All stations do not have the same price, Some are 2 or 4 cents more or less. Some will charge you about 10 to 12 cents more per gallon.

          Same thing for groceries, clothing. Same items are different prices at Walmart or Target. They all compete on price to get you in the door.

      • Brian Miller

        There is nothing preventing T-Mobile from raising money on the debt or capital markets to bid in the auctions against AT&T and Verizon and buy spectrum. Both AT&T and Verizon raised money the same way.

        T-Mo chose not to raise money to participate, which is entirely their choice — not VZ’s or AT&T’s.

        And if the government is going to stop in and start giving away spectrum, why should a multi-billion-dollar company like T-Mo get it, instead of a new start-up carrier, or Sprint, or US Cellular?

        T-Mo wants to turn its unwillingness to invest in its network into a public policy issue, when it’s really just an unwillingness to invest issue.

        • Jay J. Blanco

          Knock Knock who’s there?
          T-Mobile has been doing just that. It’s really unsustainable for a company to have a pocket full of loaded debt especially after Verizon. Verizon has 100 plus Billion in debt, that’s just ludacris

        • Brian Miller

          Debt is serviced by cash flow. Cash flow is determined by revenue and spending. Some companies are better at managing it than others… Like Verizon for example.

      • Ashton3002

        They gobbled it up because they didn’t want to participate. And read what I said. And if he wasn’t talking to me about the 700mhz which is what my post was talking about in the first place he should have said anything.

      • Brian Miller

        Moving the goalpost again.

        First the complaint is that TMUS can’t bid successfully for spectrum. That was disproven by Dish’s success despite being smaller.

        So then the argument shifted to “VZ and AT&T are going to lock TMUS out of low frequency.” But that ws disproven because Verizon sold TMUS a huge pile of low frequency.

        So now the sophistry is shifting to which bands people own or don’t own. Ironically, the 700 MHz that TMUS got from Verizon is better at propagation than the 850 MHz that Legere is whinging about.

        At the end of the day, TMUS and its supporters want US taxpayers to provide an indirect bailout to a German company that has decided not to compete financially. That’s the core issue.

  • analyzethis

    Dish received a small business discount, bid against itself to raise prices and doesn’t have a single paying customer from their existing spectrum.

  • Android_God

    Johnny boy sounds butthurt that he wasn’t one of the pioneers in building out the US wireless infrastructure. Cry me a river Johnny boy.

    • JUh22

      troll.. i can see that all your posts are insults or negative things. You don’t like Tmobile, switch carriers.

      • Android_God

        Sorry if I hurt your very delicate feelings.I will try and post cat videos in the future so you don’t have to see any negative thoughts

        • Tanner

          A cat video would be very much appreciated. Thanks!

        • Android_God
        • ForFairness

          Shut up butt wipe.

        • Android_God

          If you had ever had a good,”butt wipe” you wouldn’t be on here saying that to me sugar.

        • ForFairness

          Eeeww

    • UMA_Fan

      Yeah you should totally be against a stronger T-Mobile so AT&T and Verizon can charge everyone more. Why oh why can’t At&t just raise their prices???

      • Android_God

        your post is a complete non sequitur

        • socalrailroader

          You have a highly inflated view of yourself, time to burst your stuck up bubble

    • Kogashuko

      Android God, it isnt that he is crying it is that he is right that should concern you.

  • KingCobra

    Really agree on #3. Dish is showing no intentions of deploying anything with their spectrum holdings. It’s looking likely that they bought it to sell or lease. If you’re not going to use it then don’t bid.

    I do hope the FCC puts some stipends in place to favor the smaller carriers. If Sprint and T-Mobile don’t get a nationwide slice of 600 MHz then they probably can forget about ever competing with the Big 2 in terms of coverage.

    • Kogashuko

      Not only did Dish hoard it but they also had to sub-companies bidding against each other to drive the price up. Any other time something happened like this there would be prison time involved but since the federal government is getting extra coin they are willing to overlook it.

    • TK – Indy

      Be careful what you wish for. If all companies had equal service, they would also have equal prices. That means that Verizon and AT&T might come down a bit, but T-mobile and Sprint would surely go up.

      • Hector Arteaga

        No dude, if you had four equal quality wireless carriers, you’d have more freedom to chose and not be restricted by coverage. Your differentiator would then be VALUE.

        • TK – Indy

          The cost of the service would still be exactly what people are willing to pay for it. This hurts you, it doesn’t help, because people would be willing pay more for T-mobile service that works everywhere.

        • Jose Hernandez

          If we had 4 carriers that had great service everywhere, the only way they could fight for your business is to offer you the best value for those services. Sprint and T-Mobile are competing on price because their networks are not as strong as the other 2. If all the networks were equal, then all 4 would have to compete on price.

      • Roger Sales

        You do realize that there are many countries where this is true, and their mobile prices are significantly cheaper than anything offered in the US? If we don’t protect the 600 mhz auction and make it a level playing field we’re going to end up in Canada’s situation.

        • kgraham182

          By any chance do you know the sizes of those countries you speak of? How do they compare to the US?

        • Brayden

          What’s Canada’s situation?

      • dtam

        this world you speak of does not exist. there just will not be “equal service”. Even verizon and att have some bad spots where their coverage is deficient compared to tmobile. YMMV on the service you choose because the places you go are different than anyone else. therefore, there will always be underdogs to set prices lower

  • Mike

    I like rule #3 it’s fair to every company . If you purchase spectrum it should be used within a time frame and not sat on or u forfeit it .

  • TK – Indy

    Dish is driving up costs of spectrum for no apparent good reason, that is true. But market forces would still drive the cost of service to its current levels. It won’t change anything for us, it will only drive up the value of the companies that held the spectrum. Your bill will still be what people are willing to pay for the service. He wants you to help make his company worth more so that when DT sells, he gets more. This won’t help you a bit, and is a waste of time.

    • Adrayven

      Exactly.. I mean, WHY enable more competition! Such a bad idea anyway.. Your idea of “Do NOTHING” because its hopeless sounds like a GREAT idea!

      That was sarcasm.. in-case you’re to obtuse to catch it..

      • TK – Indy

        Why go out of your way to pad Legere’s wallet when you get no benefit from it? Go into the community and volunteer if you want to really help someone for nothing but loyalty, and a much higher-placed loyalty, at that.

        • UMA_Fan

          If Verizon and AT&T start really competing with T-Mobile on price (which they are sort of already doing now) it will help pad EVERYONES wallets

        • Allen Enriquez

          Very Great Point UMA_Fan I’ve couldn’t say any better the question now is well the government/ corporate America level the auction spectrum field?

        • Hector Arteaga

          You just don’t get it do you? It stands to reason, that if a few entities control the most valuable asset in the wireless industry, they will control prices. Therefore, allowing T-Mobile to be on par, spectrum wise, will allow for better competition. The network won’t be the problem, it will be the value. Market forces never work with no subtle intervention. AT&T and Verizon received their initial spectrum essentially free. Was that the cause of market forces?

        • Mr Paul

          In a free market, you EARN being on par, not have it given to you by the government.

          There’s a difference between making a socialist compromise like setting aside a small portion of spectrum for those who don’t have any for the sake of competition, and flat out communism.

          Also, complaining about what AT&T and Verizon has is laughable. So, where was DT in the 700MHz auction? Huh?

          Today’s moral lesson:

          When you choose an action, you choose the consequences of that action. When you desire a consequence you had damned well better take the action that would create it.

          T-Mobile is in the situation they are in today because their leaders and owners put them there.

        • Laststop311

          it doesn’t help though that when cellphones were just bemoning a thing the government handed out a ton of free low band spectrum. Really half the spectrum should be reserverd for sprint and t-mobile to bid on exclusively to even up the disparity. Then let everyone bid on the 2nd half. If t-mobile could even get a simple 10×10 mhz block of 700mhz sepctrum nationwide they could hugely and rapidly catch up to the land coverage of att and verizon

        • Hector Arteaga

          So how about setting some spectrum aside for the smaller carriers? What’s wrong with that? If the twins where so lucky to get that sort of compromise, why not now for the smaller carriers? So it is OK sometimes, but not when it doesn’t benefit whom you support? If VZW or ATT had some kind of major disadvantage to Tmo, then I would be OK with the government somehow doing a compromise to reach equilibrium.

        • Mr Paul

          You didn’t read what I wrote at all, did you?

        • Fabian Cortez

          Some people fail to realize that T-Mobile didn’t participate in the 700 MHz auction that occurred in 2008 because they were still waiting on their ROI on AWS. The same AWS that they purchased in 2006 yet could only launch in late 2007/early 2008 (blame the government dragging his feet).

          So I guess DT was expected to just throw even more money out there and hope. Especially when they don’t have the same revenue stream as the twin bells in this country.

        • Hector Arteaga

          Mr Paul ^^^ read this.

  • Brian Miller

    There’s nothing keeping Deutsche Telekom — the world’s largest wireless carrier by revenue — from bidding in the US auctions for its subsidiary. And if they don’t want to do that, T-Mo USA can always issue new shares as a publicly-traded company (or issue new bonds in the marketplace) to bid on additional spectrum.

    I’m not sure why the government should put a finger on the scales to benefit a very large multi-billion-dollar firm like T-Mo USA. Put your money where your mouth is and bid on that spectrum.

    • Jose Hernandez

      The problem here is that AT&T and Verizon are so much larger and have so much money that they can outbid T-Mobile and everyone else. DT will not be bidding.

      It would be like a regular middle class individual trying to bid against Bill Gates.

      • Brian Miller

        No it wouldn’t. It would be a few multi-billion-dollar companies, all of which have access to capital, bidding for spectrum. Dish has proven that a much-smaller-than-TMUS company can successfully bid against the largest wireless companies.

        • jej

          Dish used a discount intended for small companies to save money. They boosted the value of their full spectrum portfolio by driving up bids and they have shown no intention to actually use that spectrum. At some point they’ll probably resell for a large profit. T mobile wouldn’t be allowed to do that. I think the government either needs to help them more or allow them to sell to another carrier.

        • Brian Miller

          Dish is tiny compared to T-Mo. There’s no reason T-Mo can’t similarly cleverly compete. Period.

        • jej

          Dish isn’t even in the same business right now. Speculating on wireless spectrum is far easier to profit from than actually building out a competing network. Wireless companies benefit greatly from economy of scale making it almost impossible for a small company to compete with a much larger one. There also isn’t enough growth potential for t mobile to scale up organically. This leaves either govt subsidies or a merger as the only options left to compete.

        • Brian Miller

          Which is why T-Mobile is failing and losing subscribers due to the lack of a bailout right? Oh, they’re growing? Never mind.

        • dtam

          dish basically bought all of scraps that att left behind. the spectrum they bought were small blocks and not very appealing for cellular at the moment.

        • Brian Miller

          Dish spent 30% more than mighty Verizon in this auction. Yet much larger and better-capitalized T-Mobile claims that it cannot compete when Dish did. Clever, if the intent is to get US taxpayers to subsidize T-Mo’s business model.

    • Jay J. Blanco

      Hey who knows if t-mobile keeps revenue and profit I’m sure DT might come around. We will see though

    • RLB63

      The problem is that the government GAVE the other companies spectrum. The only fair thing would be is to give the others in the top 4 a gift of the same amount. Then let the companies bid on the rest. Leaving some for the small companies…

      • Brian Miller

        The German government gave DT spectrum as well. TMUS is a German company… Why should the US government subsidize a foreign entity?

        • Mr Paul

          I’ve made that point before. In order for T-Mobile to be taken seriously by the FCC for absolutely anything, they must first be owned by an American company, minimum requirement, period.

        • Hector Arteaga

          You’re delving into things that are more political than I usually care to discuss. So what you’re saying is, we should create a system, in which domestic companies are favored and any outside competition is stifled? Makes no sense at all. That’s totally contrair to a free market my friend. America does not do well as an isolationist nation. So stop with that rhetoric. BTW, it is Americans that benefit by the actions of T-Mo, with an American CEO and investors that get paid very handsomely. So, we should tell Verizon to give back a lot of the gains they made when they were owned by Vedafone then!!!

        • Hector Arteaga

          Oh yeah, don’t forget that pesky foreign owned Sprint that you love to defend. Let’s have the FCC take their spectrum advantage at once! Those Japanese think they can own America!

          Sarcasm BTW.

        • Mr Paul

          They already own the spectrum and are subject to getting it taken from them eventually if they fail to use it. I never said foreign-owned companies can’t buy and own, I said they especially don’t deserve a leg up.

        • Marvin Lilmarv Bolden-Mitchell

          Right

      • Mr Paul

        No, the problem is that DT didn’t GIVE T-Mobile a dime in the 700MHz auction. DT hasn’t cared about T-Mobile US and they still don’t.

        T-Mobile is so restricted in potential that unless Sprint fails and AT&T and Verizon don’t continue with their upgrade plans; T-Mobile’s hope for competition is going to be crushed in a year or two, TOPS.

        The only things that have given T-Mobile any leg up is the fact that they got a new CEO before Sprint did, and as such, got a 2-year head start; their convenient timing with AWS deployment in cities and slightly lower prices for penny-pinchers, and petty little perks if you do happen to have the coverage.