T-Mobile lost a significant bid with the FCC to increase the amount of reserved spectrum to be set aside for the smaller cellular providers in next year’s FCC spectrum auction this week.
The auction, to begin on March 29th of 2016, will distribute the spectrum equally in order to provide valuable broadband for both big and small providers to compete with on equal footing. This comes years after smaller providers have repeatedly requested that the FCC set aside a section of spectrum prohibited to major businesses (e.g., Verizon and AT&T). These restrictions are necessary for for smaller companies like T-Mobile and Sprint to have a shot at outbidding the larger and wealthier rival companies.
FCC ALLOTTED FOR THE 30 MHZ SPECTRUM ALREADY, T-MOBILE SHAFTED
The FCC agreed to save 30 megahertz of spectrum per market for the purposes of giving smaller businesses that necessary shot at sustained competition. T-Mobile had previously been lobbying for 40 megahertz, but this week the commission denied that request, arguing that T-Mobile should be satisfied with 30 MHz.
In a recent statement, FCC chairmen explained that 30 MHz is a happy medium for all parties. This seems to be more of a statistical mean than matter of fact. Some parties are lobbying for the Commission to increase the size of the allotted spectrum, while others are lobbying for it to be eliminated completely, but the FCC is going to leave the reserve right where it already is.
THE 30MHZ ALLOTMENT ALLOWS FOR PROTECTION
The 30 MHz option guarantees protection for bidders who’ve thus far gone without good portions of low-band spectrum access. To be allowed to bid on the 30 MHz, the entity or company will need to hold at least one-third less of the available high quality, low-band spectrum in any given license area.
T-MOBILE WANTED THE RESERVE IN ORDER TO OWN MARKET BETTER
T-Mobile wanted to increase the low-band reserve because the 30 MHz plan would only let carriers that are bidding on that spectrum to get one 10×10 configuration. This is technically a way of predicting how much bandwidth that spectrum will also actually provide for other, higher quality options (e.g. higher-bandwidth).
Many of the other rival companies, like AT&T, believe the FCC was right to deny T-Mobile’s request. The carriers, however, still have concerns as to the details of the auction. Last year, AT&T threatened non-participation in the auction if the FCC enforced restrictions deemed to be onerous or logistically uncouth.