T-Mobile, Sprint, Dish Network, Spire Wireless and others
are requesting changes to the way that the FCC will conduct
its auction for the 600MHz broadcast television wireless
spectrum. The group wants the federal agency to conduct
the auction as planned, with one big change; it wants half of
the spectrum being auctioned off, roughly 40MHz, to be
reserved for smaller carriers.
Current FCC laws prevent the agency from holding more
than 30MHz of spectrum aside for carriers who currently
own less than 45MHz of spectrum under 1GHz in a given
market. This would prevent industry leaders like Verizon and
AT&T from bidding. Sprint and T-Mobile argue that if the
reserve isn't increased to 40MHz, only one small carrier will
be able to grab a 10MHz x 10MHz block which would allow
AT&T and Verizon to grab 10MHz blocks or more. To
prevent this, T-Mobile would like to see purchases made
from a larger reserve limited to 20MHz. This would prevent
one small carrier from buying up all of the allotted spectrum
held aside for smaller players in the industry.
The larger carriers like AT&T and Verizon argue that by
increasing the size of the reserve, it will limit their
participation in the auction, which will lead to a lower
amount of money raised. It will also limit the amount of
spectrum put up by broadcasters to be auctioned off since
the television station owners might feel that they won't
receive an acceptable amount of money for their licenses.
FCC Commissioner Michael O'Rielly warned earlier this
month that putting too much spectrum in reserve for low
priced carriers could make the entire auction fail. As an
example, he pointed out that at a recent Canadian auction of
AWS-3 spectrum, reserved spectrum winners accounted for
only 4.58% of the total amount of the receipts. That was 20
times lower than the receipts brought in by buyers of
unreserved spectrum.
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