T-Mobile US Inc (TMUS) is pushing the Federal Communications Commission (FCC) to reserve at least half of the 600 MHz spectrum for small carriers in the upcoming 2015 spectrum auction. The company says that this is essential for improving competition in the industry.
The FCC and the US Department of Justice have repeatedly emphasized that the competition in the wireless market is not effective.
T-Mobile and Sprint Corporation (S) previously pressed the FCC to reserve some portion of the spectrum for smaller carriers, limiting the ability of large players like AT&T Inc. (T) and Verizon Communications Inc. (VZ) to gain more spectrum. Despite claiming to be the flag bearer of improving competition in the wireless industry, the amount that FCC reserved was much lower than what the companies were hoping for.
In a strongly worded petition sent on Monday, T-Mobile said that the two major players, AT&T and Verizon, have high holdings of low-band spectrum. This creates incentive for ‘anticompetitive conduct’ and the company urged the FCC to reconsider its previous stance of only reserving 30 MHz of spectrum for smaller carriers.
Together, AT&T and Verizon already own 73% of the coveted low-frequency airwaves, while T-Mobile and Sprint own only 10%.
The FCC raised $19.6 billion in the 2008 700 MHz wireless spectrum auction. At $16.3 billion, AT&T and Verizon accounted for about 83% of the auction’s total revenues.
To get their hands on the spectrum, T-Mobile and Sprint decided to join hands and raise $10 billion for the auction, but a new policy by the FCC denied them from bidding jointly for the airwaves.
The fourth-largest wireless carrier in the US, T-Mobile said that “competition in the upcoming auction is essential for driving investment and innovation in the wireless market, as the current Commission strongly favors a market with no fewer than four nationwide providers.”
T-Mobile said that AT&T and Verizon already have a major portion of the spectrum in low clearing areas and this division will not be beneficial for them. 20MHz blocks of spectrum are the ideal amount for LTE deployment.
Low band spectrum is a vital resource in the wireless industry, specifically for wireless carriers in urban settings. How the FFC responds to the petition remains to be seen.