An upcoming FCC auction may take on a different tone, should the FCC cave to demand from smaller carriers. In response to the proposed rules for the upcoming auction, which has to do with the 600MHz band the FCC just cleared for mobile carriers, AT&T has sent a strongly worded letter to the FCC. In it, they essentially threaten a boycott of the auction.
The proposed new rules — and we do emphasize proposed — would limit the purchasing power of Verizon and AT&T. That move would let smaller carriers, like T-Mobile and Sprint, snap up more spectrum than they may otherwise be able to in an open forum. The 600MHz spectrum would also give carriers more reach, as the lower spectrum has a wider spread — but not the signal strength to carry LTE natively.
In their letter to the FCC, AT&T’s Vice President of Federal Regulatory Issues Joan Marsh has the following to add:
AT&T has never declined to participate in a major spectrum auction and certainly did not intend to do so here. But if the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high quality LTE network deployments to serve its customers.
AT&T is essentially saying their purchasing power is worth more than spectrum, and if they can’t get what they want — the FCC will go wanting for their precious cash. The FCC is between a rock and a hard place on this one: auctions are meant to raise needed cash, but they also have to keep things competitive. Competition is the crux of their argument in opposition to the Sprint/T-Mobile merger, but cash is king.
The FCC has yet to respond, or comment on the matters surrounding the upcoming auction. The proposed rules also limit a company form turning around and selling or licensing the spectrum for six years, so for the 600MHz block — AT&T may be left out in the cold, cash in hand.