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Verizon Attacks T-Mobile Over Canadian Auction Rationale

Wed, 03/05/2014 - 4:11pm
Ben Munson

Verizon took to the FCC to push back hard against T-Mobile’s suggestion that Canada’s successful 700 MHz spectrum auction justifies use of below-1 GHz aggregation limits in the Commission’s upcoming 600 MHz auction.

“Proponents of restricting Verizon and AT&T have failed to present economic evidence proving that the FCC should adopt rules that disadvantage Verizon and AT&T in the Incentive Auction. There is nothing learned from the Canadian experience that cures that failure,” Verizon wrote in the filing.

Specifically, Verizon said that Canada imposed spectrum aggregation limits in an attempt to encourage a fourth nationwide entity to participate and noted that’s irrelevant to the current U.S. industry landscape. Further, Verizon said that Canadian regulators applied the same limitations to all participants in contrast to the suggested low-band spectrum limits in the U.S. that target AT&T and Verizon.

Verizon was responding to a blog post by T-Mobile’s Vice President of federal regulatory affairs Kathleen Ham, which argued that Canadian regulators imposed limits to achieve policy goals, specifically “sustained competition”, “robust investment and innovation” and increased access for all Canadians. Ham praised the limitations for giving smaller carriers a “meaningful chance” to buy low-band spectrum and noted that even with limits in place, the Canadian auction raised $4.7 billion.

But in Verizon’s filing, the carrier said T-Mobile and Sprint would count as larger carriers and that by T-Mobile’s logic, both carriers should be subject to the same limitations suggested for AT&T and Verizon.

Away from responding directly to T-Mobile, Verizon alleged that bidding in Canada’s 700 MHz auction was more “intense” for blocks not subject to caps than on the protected blocks. Verizon added that a similar outcome shaped Canada’s 2008 AWS auction, where spectrum protected from restricted carriers sold for 30 percent less than open-bidding spectrum.

T-Mobile has maintained that spectrum aggregation caps will not negatively impact auction proceeds in the U.S. The carrier pointed to the $1.56 billion just raised by the H Block auction and reiterated the FCC’s current slate of 2014 auctions should bring in enough to pay FirstNet’s $7 billion bill before the 600 MHz incentive auctions even begin.

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