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AT&T Warns FCC It Might Skip 600 MHz Auction Over Spectrum Rules

Thu, 04/17/2014 - 10:14am
Ben Munson

AT&T is threatening to sit out the FCC’s upcoming 600 MHz incentive auctions if the Commission puts in place rules reserving portions of the spectrum for smaller carriers only.

The FCC is planning to set aside up to 30 MHz in each market for smaller carriers to bid on once bidding for those markets hits a set threshold, according to the Wall Street Journal. After the threshold it hit, carriers holding at least one-third of the low-band spectrum in that market wouldn’t be allowed to bid. AT&T and Verizon would experience the most impact from this rule though in some markets, smaller regional carriers like U.S. Cellular would be restricted.

AT&T said in an FCC filing that such rules could restrict its ability to bid in markets covering more than 70 percent of the population. But FCC Chairman Tom Wheeler said it might be necessary to hold back larger carriers in order to level the playing field.

"In order to assure coverage and competition in rural America it may be necessary to assure no one can monopolize the bidding," Wheeler said in a statement.

Both AT&T and Verizon have been outspoken against the below-1 GHz spectrum aggregation limits that T-Mobile has pushed for as the FCC proceeds with the rulemaking process for the 600 MHz auction. The U.S.’s two largest carriers have both argued that such limits would negatively impact revenue for the auction.

$7 billion of the proceeds from upcoming FCC spectrum auctions will go toward paying off the FirstNet public safety network. $1.56 billion has already been raised by the recently completely H Block auction and T-Mobile has continually argued that if its projections are correct, an upcoming AWS spectrum auction and the 1695 Band auction will fully fund the project before the 600 MHz auctions even begin.

AT&T and Verizon combined currently hold the majority of available below-1 GHz spectrum licenses, which are sought-after airwaves for their stronger long-distance and in-building coverage characteristics.

The FCC plans to hold the 600 MHz auctions in mid-2015.

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