The Federal Communications Commission recently drafted some of the
rules for the complex auction scheduled for mid-2015. The auction
would reshuffle the ownership of valuable frequencies between TV
stations and wireless carriers clamoring for faster speeds and
better services for their devices.
FCC Chairman Tom Wheeler has proposed reserving part of the spectrum
in each market for wireless carriers that do not already have
dominant blocks of low-frequency airwaves there, people briefed on
the plan have told Reuters.
AT&T estimated that such a plan, which has not been formally
proposed yet, would restrict its bidding in markets covering more
than 70 percent of the U.S. population, according to Wednesday's
filing by Joan Marsh, AT&T's vice president of federal regulatory.
Marsh said the rules might force AT&T to decide to spend its money
elsewhere, which could undermine the FCC's congressionally mandated
goal of raising enough cash from the auction to pay broadcasters for
giving up airwaves, help pay for a new $7 billion public safety
network and return some funds to the U.S. coffers.
"Such restrictions would put AT&T in an untenable position, forcing
AT&T to reevaluate its potential participation in the auction,"
Marsh told Wheeler's legal advisor, Renee Gregory, in a meeting on
Monday, according to the filing.
AT&T and the No. 1 carrier Verizon Communications Inc <VZ.N>
currently dominate the low-frequency airwaves, which are valued for
their strength and reach. Their smaller rivals, No. 3 Sprint Corp <S.N>
and particularly No. 4 T-Mobile US Inc <TMUS.N>, have urged the FCC
to limit how much spectrum the two biggest competitors are able to
buy in the auction.
The Justice Department gave that position a boost a year ago,
calling for auction rules that ensure smaller nationwide networks
get some low-frequency spectrum to "improve the competitive dynamic
among nationwide carriers."
Verizon did not respond to a request for comment.
THE PROPOSED RULES
Wheeler's proposal, which has yet to be reviewed by four other FCC
commissioners, sets aside up to 30 megahertz (MHz) of spectrum in
each market for smaller carriers after bidding reaches a threshold
that will be set at a later date, sources briefed on the plan said.
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The market-based threshold, for instance, could be a particular
bidding price per megahertz or a point in the auction when TV
stations give up enough spectrum and enough money is bid on it to
deem the auction a success, said one of the sources.
The FCC chairman's office has briefed some of the stakeholders about
the plan and will circulate a formal proposal among other
commissioners next week. The five are expected to vote on proposed
rules at their meeting on May 15.
"All who want to participate in the auction will be able to bid,"
Wheeler said in a statement. "In order to assure coverage and
competition in rural America it may be necessary to assure no one
can monopolize the bidding."
Wheeler's proposal would permit all parties to bid on paired 5-MHz
blocks of airwaves until the threshold is triggered and only the
companies with less than one-third of the low-band spectrum in that
market are allowed to bid.
In some markets, the players facing the restriction would include
smaller carriers such as U.S. Cellular Corp. <USM.N>
AT&T, in Wednesday's filing, expressed concerns that, in some
markets, the plan to restrict up to 30 MHz could leave only one
bidder with an opportunity to get a block of airwaves large enough
to deploy LTE technology.
"If the restrictions as proposed are adopted, AT&T will need to
seriously consider whether its capital and resources are directed
toward other spectrum opportunities that will better enable AT&T to
continue to support high-quality LTE network deployments to serve
its customers," Marsh added.
(Reporting by Alina Selyukh; editing by Jonathan Oatis and Andre
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