FCC Chairman confirms plan to limit buying power of AT&T, Verizon

April 17, 2014
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Leading up to this article, there was a lot of speculation about the FCC’s position in their upcoming spectrum auction. A call to action from several smaller carriers asked that the regulatory body limit the purchasing power of the two largest domestic carriers, Verizon and AT&T. In a move that could limit the FCC’s income from the auction, Chairman Tom Wheeler has confirmed he wants to limit the power AT&T and Verizon have.

In a letter to 78 House members today, Wheeler said he was proceeding with the limitations in the spirit of “equity and openness”. He went on to say the FCC wants to “deliver to consumers, regardless of their zip code, greater wireless competition, improved services and lower costs.” Wheelers letter was in response to a note form those House members who urged him to allow free and open commerce in the next auction, which would help reach revenue goals set forth by Congress.

Wheelers plan is to “reserve a modest amount of this low-band spectrum in each market for providers that, as a result of the historical accident of previous spectrum assignments, lack such low-band capacity”. The upcoming auction is for the 600MHz spectrum band, which would improve the coverage area of those who purchased it. Wheeler wants to reserve about one-fourth of the overall spectrum for those who have less than 30% of the spectrum per market:

Today, most of this low-band spectrum is in the hands of just two providers. The Incentive Auction offers the opportunity, possibly the last for years to come, to make low-band spectrum available to any mobile wireless provider, in any market, that is willing and able to compete at auction.

As we’ve reported prior to this announcement, Wheeler’s actions may have an adverse effect on Sprint and T-Mobile merging. By allocating spectrum for those who aren’t AT&T or Verizon, the FCC is leveling the playing field a bit without carriers uniting to face the duopoly held by the nation’s two largest carriers. The FCC will vote on his proposal in May.

Source: The Hill


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