FCC votes to reject revised limits on AT&T and Verizon in upcoming spectrum auction [UPDATED]

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UPDATE: John Legere has responded to the FCC’s decision, saying that T-Mo is “committed to showing up, playing hard, and being successful at the auction.” You can find his full stream of tweets related to the FCC’s decision at the bottom of this post.

 

T-Mobile has been lobbying the FCC to set aside more spectrum for smaller carriers — aka not AT&T and Verizon — in the upcoming 600MHz auction, but it looks like their efforts failed.

A report from Reuters says that the FCC has voted to deny T-Mobile’s request for more spectrum to be set aside for smaller carriers in the upcoming spectrum auction. The existing rules set aside 30 megahertz, less than half of the spectrum in each market, for smaller operators. T-Mobile wanted to bump that limit up to 40 megahertz, or at lest half of the spectrum.

Today’s news is a bit of a disappointment for Team Magenta. More spectrum is always a good thing, especially when it comes to the low-band spectrum that’s going to be available in this upcoming auction. It’s estimated that AT&T and Verizon already have around two-thirds of the country’s low-band spectrum, so it’d be nice to see smaller operators have an opportunity to score more of that valuable spectrum without worrying about the nation’s two largest carriers waltz in and outbid everyone else. Unfortunately, it looks like Team Magenta will have to make do with the existing restrictions.

The 600MHz spectrum auction is currently expected to be held in early 2016.

Source: Reuters

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  • YABD

    Money can buy almost anything.

  • Paul Garrison

    Then why stop mergers.

  • Deadeye37

    How much of that low band spectrum is being used by Verizon & ATT? If they’re just sitting on it, I think the FCC should require those companies to utilize it, or sell it.

    • Willie D

      They tell companies that they must deploy 2.5Ghz and AWS in a set amount of time or lose it, but dont tell companies with 700/850Mhz they need to use it or lose it. That a crock of crap. They need to say “All spectrum purchases in low, medium, or high band are subject to usage terms” and look and determine if a network is using 3/4 of their spectrum in that group, then they can buy more, if not, then no they dont need to. Example, if Verizon was using 75% of 700Mhz, then they should be able to participate, but if they are only using 74% then no.

      • Justin Smith

        T-Mobild hasn’t deployed most of their AWS spectrum. In rural America they have 0 AWS-1 deployed, so that can be said for them as well.

  • Derrick

    Welp guys,2 what’s next. I guess maybe the parent company will help us out now?

  • Willie D

    It is such a loss, and a real disappointment from the FCC. An agency that says that they want 4 national carriers to compete, wont allow mega-mergers, so kinda, they have a responsibility by endorsing the two smaller carriers by FORCING them to operate business when BOTH wanted to leave, or merge together to compete. In this sense, the FCC just abandoned them, and said to AT&T and Verizon, “Buffet served, eat all you want”, and let TMobile, USCC, Sprint, and the myriad of other smaller players to suffice with 30Mhz. Leaving what? 65% of the spectrum up for AT&T and Verizon? What SHOULD have happened is that the 30Mhz is not subject to ANY restrictions, but the remaining 50Mhz would have to be OPEN NETWORK, OPEN ROAMING.

    • Justin Smith

      It isn’t set that 50Mhz will even be available to bidders. The TV stations have to give up their spectrum first.

  • besweeet

    Legere was being sarcastic when he said this is a #victory, right? Just making sure we’re all on the right page.

  • taron

    What is the code for lg phones to see what bands your on

  • Why would the FCC do anything to bring less dole from the auction? Who regulates the regulators? Nobody, it is.

  • Raiterio Patterson

    The FCC approved the merger between AT&T and DirecTV, I’m surprised by their decision

  • Rob H.

    Competition can only continue if the playing field is leveled for all players. IF anything AT&T and VZW should only be allowed to bid on the 30mhz set aside, and let all the smaller players bid on the larger chunk. Then if the smaller players don’t buy up all of the larger chunk, then put it available for AT&T and VZW. I also agree with the use it or lose it stipulation. Stop spectrum hoarding, IE: Dish.

  • vinnyjr

    What a damn shame, FCC should be ashamed of themselves. Im positive John Legere will figure it out, if anyone can pull a rabbit out of a hat he can.

    • You also have to remember that not all of it will be used immediately. Some of it will be sold and can be purchased later on as we’ve seen T-Mobile do with 700MHz. Granted, they’re not the highest quality airwaves, but they have improved things, particularly with regard to indoor penetration.

      • SirStephenH

        “Granted, they’re not the highest quality airwaves”

        The only reason band 12 block A Spectrum was originally avoided was because of signal interference from channel 51 stations that the carriers were too lazy to take care of. T-Mobile has worked with nearly every channel 51 station in areas where they own band 12A to have them move to a lower channel thus clearing the way for their spectrum to be deployed.

  • Every mobile operator who participates in the 600 auction should be required to have Windows phones and Blackberries in stock in their stores.

    • I upvoted you because it’s clear that you care about healthy competition on the mobile operating system side and as a Windows Phone user and blogger, I must agree with that point at least.

      However, it’s a pretty moot point since most of the carriers I’m aware of carry Windows Phones / Windows 10 Mobile and BlackBerry devices anyway, including T-Mobile.

    • SirStephenH

      And who pray tell doesn’t already?

      • I know US Cellular doesn’t currently sell Windows or Blackberry phones.

  • DStudio

    Verizon wants the spectrum, no doubt. All the analysts I’ve read say Verizon (and other carriers) will have too little capacity in about 3 years. And there’s no good solution yet.

    They need all the spectrum they can get. So they want it. And given the choice, they’d rather have low frequency spectrum. This already promises to be a VERY expensive auction – for a very limited resource. Why drive up the price before the auction even begins?!

    • Justin Smith

      Verizon says they want mid to high band spectrum the most, according to fiercewireless.

      • DStudio

        That’s my point. These statements are very calculated. And they’re logical as well. Verizon truly *can* use more mid to high band spectrum. In fact, lately they’ve been doing a GREAT job with what they already have. I’d love to see them do more of that.

        Nevertheless, EVERYONE wants that 600MHz spectrum. The only problem is no one wants to pay as much as it’s likely to sell for.

    • k

      verizon is also looking at LTE-U. they are already facing capacity issues if they are exploring that.

      keep in mind thoughthat there are still man more network configurations that can be executed to improve throughput…small cells, teaming up with comcast. spectrum is not the only thing that verizon can do.

      • DStudio

        They’re already doing ~small cells (or something technically similar).

        But spectrum is too hard to pass up, I think. It’s simply too important – a foundational piece of the puzzle.

        Various technologies may multiply the capacity they can get out of a given amount of spectrum, but they still need spectrum. Unlicensed spectrum is too inconsistent to build a nationwide network on.

      • VernonDozier

        No…

        Comcast and the Cable industry wants to get into wireless, and they plan to partner with Verizon to do it.

        With this combination, Verizon could have the cable companes install microcells on telephone poles in the cable company’s right-of-way easement.

        When that happens, Verizon can have its customers on unlimited rateplans using microcell technology that costs about $3000. Yes, it would have a more limited range, but cost so so much less in cities and towns. To compare, a Macrocell tower would cost cost $250,000, and take 6mos or longer to get approvals.

  • BlackberryOwner

    The Problem Legere is your parent company. The FCC knows that DT has a lot in cash reserves and they are unwilling to invest in your company, despite the fact that TMO-USA is the brand that gives them more income. You need to sit with Höttges and explain to him why USA is a good market for them and also sell him a sort of “uncarrier” so he can invest here. I disagree with the FCC ruling but I understand their position. Why would they help TMO-USA when DT is not willing to do so? They are taking all the profit to Germany and using it there. I have no problem with that however when it is needed the other way around DT should also help TMO-USA.
    You can’t cry poor me poor me when you are part of one of the largest Telecom Corporations in the Universe!!!

    • UMA_Fan

      It’s not like DT hasn’t done anything for tmobile. They did buy MetroPCS for them and gave them an extra 3 billion that year to start their LTE network.

      It could very well be possible considering how much tmobile has grown that DT would be willing to invest in the low band. Tmobile is worth more than DOUBLE the share price from when they first went public which was $16

      • VernonDozier

        The doubling of the stock value is a very strong indication of how poor management they must have in Germany.

        • Fabian Cortez

          The doubling of the stock value is a very strong indication of how poor management they must have in Germany.

          And what’s a strong indication of Sprint’s stock being in the gutter?

      • BlackberryOwner

        Ha Ha! you are talking to a lawyer here who works in mergers an acquisitions!! No, T-Mobile did not “legally” buy Metro PCS it was a reverse merger and T-Mobile was subsumed into Metro PCS. DT then created a holding company in the Netherlands to avoid US taxes why? Because they did not purchase Metro PCS it was a transaction made entirely in the USA. T-Mobile used some of its own money obtained from the failed acquisition from AT&T plus a “value” in stock from the new company that went public. They needed to go public to raise capital because DT is not, let me rephrase is not and will not, invest a dime in the USA market! The capital was also used for their LTE expansion, also being a public company now it allowed them to raise more capital by selling shares of the new company and build their LTE network!
        Whomever told you that DT “bought” Metro for T-Mobile lied to you. Go ahead and find a source that shows that DT invested one cent in its American subsidiary in the last five years, let alone buy Metro PCS for them!!!
        DT CEO and the board of directors has been wanting to exit the USA for years and it will not be congruent with their public disclosures that they do not want to be part of the USA market and then turn around and “help” T-Mobile to buy Metro PCS. That will be a breach of their fiduciary duty!!
        Now the last statement from the CEO was along the lines of “we like it now” “we are not in a rush’ they “add value to our company meaning DT etc… It will be more reasonable to invest now since they changed, so called, their posture on T-Mobile USA.

  • GinaDee

    30 MHz is still a ton of spectrum. The key is can T-Mobile afford to outbid the other smaller carrier’s alone? The answer is a big fat no without incurring more debt than the company is worth.

    It’ll likely be chewed up and scattered in chunks by all the regionals leaving only scraps.

    They need a huge investment partner since their mother company is acting like a dead beat parent.

    Comcast needs to come in and buy them NOW so by the time the deal closes Comcast can pony up the $$$ to buy the necessary spectrum.

    • No. Not Comcast. That’s not a good idea at all. Nor is Google. We need a good and compatible match that’s going to make sense. At the same time, T-Mobile does indeed need to get away from their parent company, that is definitely true.

      • gadget_hero

        I’d love to see US Cellular and T-Mobile tie the knot! T-Mobile would get access to most of the rest of nationwide B12, and they could sell some PCS (to Sprint most likely perhaps even AT&T/Verizon) and get some 600 MHz in the upcoming auctions. Subs+more low band spectrum would give them the edge to make real problems for AT&T, Verizon should be insulated for a while on the strength of their network.

        • See, that I can see. It would certainly make sense, but US Cellular doesn’t own most of their 4G LTE spectrum. I can’t remember the exact name of the company right now, but it has the word “street” in it I think lol. I can’t look it up at the moment. Anyway, T-Mobile would have to buy them too.

        • gadget_hero

          Yeah its King Street Wireless. I imagine any deals that USCC has would transfer to the new company.

    • k

      the ceo of DT, was quoted something to the effect that DT is gearing up for the auction.

      based on their financials, and what DT said, i could see a scenario here where stock could also be issued for funding as well.

      also keep in mnd that DT sold their interest in EE in the UK. They hv cash on hand as well.

      and if DT thinks that TMUS is a kingmaker, a somewhat modest investment in spectrum makes TMUS look more of a prize warrantying a higher valuation

      • VernonDozier

        No, that’s likely not going to happen. If TMUS issues stock, it also adversely affects the creditworthiness of DT.

        It makes sense, but the reality is that T-Mobile announced that it divested of the liability related to phone financing.

        That announcement was is a huge nail in the coffin because when they did that, banks won’t be able to issue credit. In order for a company like T-Mobile to access the commercial paper markets, the banks review creditworthiness but most importantly “Cashflow.”

    • gmo8492

      T-Mobile would have to reach the 5 to 10 billon dollar mark if they want to reliably have enough to buy the spectrum they currently need. This auction is gearing up to be another record breaker with everyone trying to bid aggressively. Verizon says they don’t seem that interested, but I’m calling their bluff. Hopefully we will see T-Mobile move forward and win some good amounts spectrum.Their back up plan would probably be to buy the remaining band 12 licenses from spectrum hoarders.

    • VernonDozier

      30Mhz is a “ton”? Um, no. That’s 3 sectors on a single 10×10 network cell site, and many cell sites have more than 3 sectors.

      You have to account for interference and as a design principle, you can’t use that frequency again until it’s really, really out of range.

      • Fabian Cortez

        30Mhz is a “ton”? Um, no. That’s 3 sectors on a single 10×10 network cell site, and many cell sites have more than 3 sectors.

        You have to account for interference and as a design principle, you can’t use that frequency again until it’s really, really out of range.

        What are you talking about?

    • SirStephenH

      “30 MHz is still a ton of spectrum.”

      LOL. 30 MHz split among Sprint, T-Mobile, etc IS NOT “a ton of spectrum.” Yes they can bid on more but outbidding AT&T and Verizon is unlikely. T-Mobile needs a minimum of 20 MHz for a 10×10 which is two thirds of the reserve.

  • Good! Since T-Mobile refused to play nice and price match the cheap Grand Prime device by 189.99 vs 129.99 (Cricket). YOU GOT WHAT YOU DESERVE! Time to stop sucking T-Mobiles ***k. Like Verizon and AT&T have said, they have the $, either pay up or GET LOST!~

  • Hollywood J Blaq

    I really believe that the next move falls on DT. While they have reservations about the long term viability of T-Mobile, they also know that if they put T-Mobile into a position to win, they can double the asking price for T-Mobile USA. If T-Mobile wins enough spectrum to truly compete against AT&T while staying profitable, DT might even keep them around.

    With T-Mobile moving into the bronze position (which in reality is the pole position for B level carriers), the other carriers are getting scared. If T-Mobile gets low band spectrum, the one true advantage that Verizon and AT&T have will be gone. Then it becomes about price, customer service and the old “what have you done for me lately” proposition.

    So the big question isn’t how will T-Mobile come out on top, it’s how much will Verizon and AT&T spend to make sure that T-Mobile stays where they are at?

  • Roberto Jaimes

    They didn’t want Sprint buying T-Mobile so there could be healthy competition, but how can there be healthy competition if both Sprint and T-Mobile lack the resources to fully compete with AT&T and Verizon? Completely unfair.

    • VernonDozier

      Why is this unfair? AT&T and Verizon have businesses selling communication services since the 1800s. Banks and financial institutions trust them since the days of JP Morgan. T-Mobile has too much controversy, the company will talk about anything except its coverage, or guarantee it. If you call them out on coverage, their only resolution is to cancel your contract and return the phone.

      Also with T-Mobile… no one really knows why it didn’t bid for 700MHz years ago. Plus, the other issue is asking if 600MHz is an “international band” or if European Customers would be better off if customers traveling from Europe to the US would be better off using a network from a non-european company like AT&T.

      Remember– The German Automobile industry already had that discussion too. Ultimately, they all switched from T-Mobile to AT&T. They announced that change the day Legere was escorted out of the Mackelmore Concert; that was the reason AT&T hired Mackelmore to celebrate.

      As for history, well, Sprint was a communications network started by rail roads. Sprint wanted to force AT&T to connect their fiber optic networks to the thousands of central offices around the country but AT&T already had their own way to connect offices together.

      Deutsche Telekom, on the other hand, was a part of the German Government, and a monopoly until 1995.

      I guess the point is that T-Mobile sells service which is OK but as you grow older, you’ll learn that because AT&T and Verizon have been in business for so long that they sell other services too. But T-Mobile can’t seem to get coverage for one service correct.. Instead, they print maps whose coverage is a bit… well, “optimistic” and the roaming allowance is terrible, your generally better off without roaming at all. Overall, it’s almost as if T-Mobile had the money to build antennas and coverage, their maps represent where they’d give it a shot… if the price is right.

      • Fabian Cortez

        More doomsday theories from you Clifton K. Morris/VernonDozier.

        We know very well why T-Mobile didn’t participate in the 700 MHz auction.

        I thought you said you were well-paid to make analysis. You’re not doing too good of a job.

  • SirStephenH

    Another win for corporate America…

    • Another win for the alliance between state power and corporate power, aka fascism.

  • Botiemaster

    I have to say, TMO’s parent company needs to man the fuck up and spend some real money if they want their purchase of tmo to be worth while.

    • Joe

      I agree if they don’t give tmo at least 5 billion than they might as well not be in the auction.