In a second development that relates to the incentive auction, the FCC voted unanimously Wednesday to deny reconsideration of rules, promulgated last year in the mobile spectrum holdings proceeding, that reserve a 30 MHz swath of spectrum in each market during the incentive auction for non-nationwide carriers and for nationwide carriers that hold less than one-third of available low-band wireless spectrum in a given license area.
The FCC’s decision represents a defeat for T-Mobile US, which had urged the FCC to boost the spectrum reserve to at least 40 MHz to enhance the ability of smaller carriers to obtain the low-band spectrum resources they need to compete effectively against market leaders Verizon Wireless and AT&T. While T-Mobile further claimed that a 40 MHz reserve is warranted in view of the fact that AT&T and Verizon together control more than 70% of desirable sub-1 GHz spectrum resources in the U.S., AT&T and Verizon argued against any spectrum set aside on grounds that such a reserve unfairly singles out competitors for special treatment and could also drive down auction revenues.
Denying reconsideration, the FCC determined that the previously-adopted reserve of 30 MHz is sufficient to ensure access to high-value spectrum resources by smaller wireless carriers in the incentive auction. The FCC also preserved rules that trigger the full spectrum reserve once TV broadcasters surrender at least 84 MHz of spectrum for the forward auction. (T- Mobile had sought rule changes that trigger the reserve once a minimum price is met or when the auction raises enough money to reimburse TV broadcasters for their spectrum or for their relocation costs.) Despite the FCC’s vote, T-Mobile CEO John Legere voiced optimism about the auction, tweeting that “the reserve includes great quality spectrum and [it] looks like the FCC will be monitoring closely so a duopoly can’t game the system.” As such, Legere proclaimed that T- Mobile remained committed to “showing up, playing hard and being successful in the auction.”