News this morning from the Commission states that Tom Wheeler, the FCC’s chairman, is pushing against T-Mo’s request to raise the spectrum reserve in next year’s low-band auction. In a blog post today, Wheeler stated the following:
“While some parties have petitioned the Commission to increase the size of the reserve, the draft Order on Reconsideration I am circulating today would maintain the reserve size at the current level. The draft Order concludes that the current reserve size of 30 megahertz balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.
The rules adopted last year permit national carriers to bid for reserve spectrum in markets in which they have limited low-band spectrum and do not restrict any reserve-eligible bidder from bidding on unreserved licenses. There will be significant spectrum made available in all markets of the country to all bidders. As a result, consumers will benefit directly from competition in all parts of the country.”
In short, the FCC has to try and balance out the auction so that it is good for both the big and small carriers. There’s no good swinging the auction in favor of the small guys to the detriment of healthy competition between the likes of AT&T and Verizon. It’s not news T-Mobile wants to hear – and I’m sure John Legere will have a word or two more to say about this – but I can see the argument. It does make some sense, as uncomfortable as it is to read.
After successful petitioning last year, T-Mobile convinced the Commission to ensure that there was at least some of the available spectrum kept aside for smaller carriers. With the rules put in place, 30MHz blocks of spectrum in each market are reserved for companies/carriers who don’t currently own a lot of low-band.
Since that decision was made, T-Mo has been pushing hard to raise the reserve from 30MHz to 40MHz or half of the spectrum. This morning’s recommendation would – if accepted by the other Commission members – see that request rejected. It’s a bit of a blow for T-Mobile. But the very fact there’s a 30MHz reserve already in place is still a major improvement on the original terms planned for the auction, which would have left it as a free-for-all. In other words – Verizon and AT&T would more than likely have scooped up almost all the spectrum on offer. So let’s just be glad there’s a reserve at all.