T-Mobile 600 MHz Spectrum Strategy Is Protection from Competition in Urban Markets, Says AT&T

by Istvan Fekete on June 17, 2015

AT&T slammed T-Mobile’s push to expand the amount of spectrum smaller wireless players can bid for in next year’s 600 MHz spectrum auction, saying that the carrier’s strategy is to protect urban markets, not expand rural coverage.

As we previously reported, T-Mobile has been pushing for the set-aside spectrum for next year’s auction to be at least 40 MHz, up from a maximum of 30 MHz. The fourth-largest national carrier argues that without that rule, smaller players won’t get enough low-band spectrum to compete against Verizon and AT&T, which, by the way, control 73% of the spectrum below 1 GHz.

“T-Mobile has made no secret of the fact that we want and need more low-band spectrum,” T-Mobile CEO John Legere said last week. T-Mobile is pushing for more low-band spectrum to expand its rural footprint and improve its inbuilding coverage. “In rural areas, people are stuck with only dumb and dumber to choose from,” Legere said, referring to Verizon and AT&T.

Under the current auction rules, carriers with less than 45 MHz of spectrum below 1 GHz in a given market are allowed to bid on that market. This was the case with Rogers and Bell in the 2500 MHz auction: Since they had plenty of spectrum in certain geographical areas, they weren’t allowed to bid on spectrum in those regions, so Telus scored big during that auction.

AT&T, however, doesn’t seem to agree with the T-Mobile initiative, and points to its rival’s possible strategy behind that. AT&T’s vice president of federal regulatory, Joan Marsh, says that if the government accepts T-Mobile’s initiative, it will actually be allowing the carrier to officially protect itself from bidding competition in urban markets.

“What the restrictions are actually designed to do is protect T-Mobile from bidding competition in urban markets–even though T-Mobile itself argues that 92% of non-rural Americans have access to four or more mobile broadband providers,” she wrote. “Only 40% of rural Americans, T-Mobile argues, enjoy the same and thus T-Mobile tries to build a case for expanding the restrictions to support deployment in rural America.”

His main argument against raising the amount of set-aside spectrum is that AT&T’s low-band portfolio is not sufficient to trigger the restrictions. He quickly pointed to areas such as Iowa and Nebraska, Kentucky, Montana, Oklahoma, the Dakotas, Tennessee, and Wyoming, where AT&T won’t face restrictions, emphasizing that an expanded spectrum set-aside is not about servicing rural America: “It’s about protecting T-Mobile in the most urban markets in the country – markets where T-Mobile is currently competing very effectively and boasting about having the deepest spectrum portfolio per customer and the fastest LTE networks in the industry.”

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Written by: Istvan Fekete. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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