Compromise Could Be in the Offing on Spectrum Aggregation Rules
FCC staff are reportedly trying to work out a deal with Verizon and AT&T, as well as small carriers, that would give the two big carriers a shot at buying more spectrum in the TV incentive auction while heading off a potential court challenge to the agency’s spectrum aggregation rules, said industry officials who have been briefed by the FCC. A commission spokesman declined to comment Friday.
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The Competitive Carriers Association has complained that some of its members also could be hurt by the rules, which would keep a few smaller carriers -- such as U.S. Cellular and C Spire Wireless -- from bidding in their home markets. Commissioner Mignon Clyburn in particular has insisted that the FCC keep small carriers from taking a hit, industry officials said. But the 2012 spectrum law that permits the FCC to hold an incentive auction requires that any rules on bidding in the auction be rules of “general applicability,” making a carveout just for small carriers difficult and potentially open to legal challenge.
A compromise under discussion at the FCC would give AT&T and Verizon a chance to buy 20 MHz each in all markets across the U.S., while allowing competitors to bid on all spectrum in every market without restrictions, industry sources said. One former FCC legal adviser with wireless clients said another possibility is that the FCC will approve paired 4 MHz licenses, rather than 5 MHz licenses, with an eye on maximizing the number of licenses that will be available in the auction.
"CCA has consistently supported and will continue to support an incentive auction framework that provides aggregation limits, like the FCC’s proposed reserve, so competitive carriers may have the opportunity to bid on and win low-band spectrum,” said Steve Berry, president of the Competitive Carriers Association. “We encouraged the FCC some time ago to adopt a national market power review standard recommended by the Department of Justice in a letter filed with the FCC last year. This standard is generally applicable and simple to implement, and it would allow AT&T and Verizon to bid on reserved spectrum in many markets. In fact, AT&T would have the opportunity to bid on almost 2/3 of all reserve spectrum markets and at least 20 MHz of unreserved spectrum nationwide -- not a bad deal for one of the largest carriers.”
In a Friday ex parte letter to the FCC, AT&T Vice President Joan Marsh said as the FCC argues set-asides are needed to speed deployment in rural areas, “it should impose the restrictions only in rural license areas, not in urban areas where the restrictions will disproportionately impact AT&T."
Sprint and T-Mobile, meanwhile, released comments firing back at an AT&T filing on spectrum aggregation rules (CD May 9 p13), which took on the two smaller carriers’ earlier arguments in favor of bidding limits. “Once again, AT&T misses the point,” T-Mobile said. “The FCC record is replete with information on the unique characteristics of low-band spectrum. The rulemaking on the incentive auction must make sure all carriers have reasonable access to this spectrum.”