FCC Chairman Tom Wheeler is urging the Commission to approve new incentive auction rules that would refrain from increasing the amount of spectrum reserved for smaller carriers.
In a statement, Wheeler said that he will begin circulating a draft Order that will be voted on at the Commission’s next meeting which concludes that the current reserve size of 30 MHz “balances the desire to make low-band spectrum available to parties with limited holdings, while also facilitating competitive bidding for all auction participants.”
Multiple reports have surfaced over the past few weeks that Wheeler was leaning towards keeping the current reserve amount.
T-Mobile, Sprint, and a number of consumer advocacy agencies have been aggressive in trying to get the spectrum reserve raised. AT&T and Verizon, meanwhile, have argued against raising the set-aside amounts.
T-Mobile asked that the FCC consider reserving half or more of the 600 MHz spectrum cleared for auction for smaller carriers to bid on. In an FCC filing, T_Mobile said that adjusting the spectrum reserve based on different clearing scenarios would “promote robust competition among service providers and ensure the continued vitality of four nationwide providers.”
Under T-Mobile’s new proposal, the spectrum reserve could have been as large as 50 MHz. The carrier reasoned that 20 MHz (10×10 MHz) blocks are ideal for low-band spectrum deployments but, under the current reserve plan, only one competitive carrier could potentially secure that amount of low-band spectrum.
T-Mobile’s request was backed by the Department of Justice in a filing it submitted to the FCC on Wednesday.
T-Mobile released a statement in response to the ruling, saying that called low-band spectrum “the holy grail for AT&T and Verizon.”
“If others get it, and the Big Two have to compete on price, their customers alone would save over $20 billion per year,” T-Mobile said. “That’s why everyone with a wireless phone has a stake in the outcome of this proceeding, and the FCC should heed the calls of DoJ, many in Congress and a slew of consumer groups and move to strengthen the reserve.”
Aside from not raising the spectrum reserve, Wheeler also said that he will propose caps on the total value of bidding credits available to smaller companies, which he says would minimize an incentive for larger companies to take advantage of the program. Some have argued that Dish Network abused that system in the AWS-3 auction, when it landed $3 billion in discounts on the spectrum its bidding partners won.
“We must also make sure that small businesses receiving credits are exercising independent decision-making authority,” Wheeler said in his statement. “We will not allow small businesses to serve as a stalking horse for another party.”
In a blog post, AT&T proposed a $10 million cap on bidding credits available to any individual applicant, an amount the carrier said would provide a “meaningful benefit to the very types of business the program is designed to benefit, while ensuring policymakers that those who seek to abuse the program will not be rewarded.”
In his statement, Wheeler said he will also urge the Commission to approve new rules that would revamp what he called “outdated spectrum auction bidding policies” in order to minority-owned businesses and rural service providers to better compete in the marketplace. The new rules would create a new rural business bidding credit that Wheeler said will incentivize participation in future auctions by rural service providers in the communities they serve.
The FCC’s next open meeting is scheduled for July 16, 2015.