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:
- 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.
- 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.
- 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.