U.S. spectrum sale must spur wireless competition - Justice Department

[Rawvega]

http://finance.yahoo.com/news/spectrum-auction-promote-wireless-competition-164241897.html

 

By Alina Selyukh

 

WASHINGTON (Reuters) - Smaller wireless carriers should be able to get a fair share of spectrum in the forthcoming U.S. auction to ensure the market is competitive, the Justice Department told the Federal Communications Commission in a filing made public on Friday.

 

The filing underlines the high value of the low-frequency spectrum that will be auctioned off, and delivers a blow to the two largest U.S. providers, Verizon Communications Inc (VZ.N) and AT&T Inc (T.N), in their efforts to acquire those airwaves.

 

"The Department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carriers and benefit consumers," the Justice Department said.

 

Federal telecom regulators are drafting rules that would guide a major shakeup of ownership of airwaves that carry radio signals through a large and complex auction of some of the most attractive spectrum, to be held in 2014 or possibly later.

 

Verizon and AT&T worry that the FCC's auction rules would put caps on how much spectrum one provider could buy or otherwise limit their participation in the auction. Sprint (S.N) and Deutsche Telekom AG's (DTEGn.DE) T-Mobile, lagging far behind as No. 3 and No. 4, have lobbied for assurances they would be able to go to bat against their larger competitors.

 

In the filing, the Justice Department gave a boost to T-Mobile and Sprint, which currently own no or very little spectrum in the low-frequency band, valued because of its ability to better reach through walls and other obstacles.

 

"The Department believes it is important that the Commission devise policies that address the allocation of low-frequency spectrum in particular so that acquisitions of such spectrum do not hamper the ability of carriers in markets where that spectrum is important," the Justice Department said.

 

Signed by the department's antitrust chief William Baer, the filing urged the FCC to "maintain vigilance" against any efforts to further concentrate market power, warning that carriers may have incentives to buy spectrum not for better services or efficient expansion but just to deprive competitors of access to the valuable airwaves and to keep costs high.

 

"A large incumbent may benefit from acquiring spectrum even if its uses of the spectrum are not the most efficient if that acquisition helps preserve high prices," the filing said.

 

The Justice Department suggested the FCC may want to allow big carriers to buy "smaller blocks" of low-frequency spectrum "even if it seeks to restrict the acquisition of larger blocks."

 

Consumer advocates and Sprint welcomed the antitrust authorities' position, touting its importance for competition.

 

"The Justice Department is absolutely right," said Larry Krevor, Sprint's vice president of government affairs. "We are hopeful that the FCC will adopt policies which recognize the importance of low-band spectrum to wireless competition and the American economy as a whole."

 

AT&T and Verizon did not immediately have comment and T-Mobile declined comment. AT&T in the past has argued against valuing low-frequency spectrum higher than other airwaves.

 

(Editing by Mohammad Zargham and Eric Walsh)

[supert0nes]

I would like to see T-Mobile limit the amount of spectrum they purchase to only markets they desperately need more in the next AWS auction and go all out on the 600 auction.

 

I think AT&T will invest heavily in AWS spectrum during the next auction and should definitely be allowed to.

[4GHoward]

I would like to see T-Mobile limit the amount of spectrum they purchase to only markets they desperately need more in the next AWS auction and go all out on the 600 auction.

 

I think AT&T will invest heavily in AWS spectrum during the next auction and should definitely be allowed to.

 

I agree before too much spectrum goes unused. I remember reading that Leap Wireless is only utilizing about 40% MHz POPs of spectrum while about 60% MHz POPs of the rest of the spectrum is not being utilized as of the end of 2012.

 

Source: http://www.fiercewireless.com/story/leap-ceo-60-our-spectrum-not-being-used-and-were-interested-network-spectru/2012-11-01

[evo bryan]

With the recommendations provided to the FCC from the Department of justice aimed at spectrum auctions, placing importance on spectrum under 1,000 Mhz. DOJ made its case that the nation's two largest carriers currently hold market power.one can easily surmise that it's guiding the FCC to establish rules that favor smaller carriers mainly Sprint and T-Mobile. In the DOJ's opinion, a carrier would need to demonstrate both compelling evidence of capacity constraints and an efficient use of its current licenses in order to gain additional lower frequency spectrum. Otherwise, the opportunity exists for AT&T and Verizon to snap up licenses simply in attempt to harm competitors.

 

Steven Berry, head of the Competitive Carrier Association[/color]]

 

 

CCA couldn't agree more with [the] DOJ that excessive market power harms competition. AT&T and Verizon control almost 85 percent of the spectrum below 1GHz, using its market power to thwart competition and prevent competitive carriers from using their own spectrum in the Lower 700MHz band.

DOJ is correct -- allowing smaller carriers to access additional usable spectrum would benefit the entire competitive wireless ecosystem and consumers. DOJ should be commended for their outstanding work, and I hope the FCC carefully considers these findings as it continues to evaluate mobile spectrum holdings and craft rules for the upcoming incentive auctions.

 

source

 

http://www.reuters.c...E93B0TF20130412

Edited April 14, 2013 by evo bryan

[dstar2002]

This is a good thing. Will hopefully lead to a weakening of the duopoly over time, as it will allow a fair competition and prevent the big boys from locking everyone out of the sandbox. Score one for consumers.

 

Sent from my SPH-L710 using Tapatalk 2

 

 

[Bob Newhart]

Look at how much of the spectrum Sprint is actually using across the country, hardly any of it.

It looks like Verizon are AT&T are actually expanding their coverage to use theirs.

T-Mobile on the other hand, is much worse.

[supert0nes]

Look at how much of the spectrum Sprint is actually using across the country, hardly any of it.

It looks like Verizon are AT&T are actually expanding their coverage to use theirs.

T-Mobile on the other hand, is much worse.

 

 

The lack of rural coverage is the point of the DoJ's remarks. Sprint is using their spectrum in the cities, and will be using even more once they deploy NV hardware.

[WiWavelength]

Look at how much of the spectrum Sprint is actually using across the country, hardly any of it.

It looks like Verizon are AT&T are actually expanding their coverage to use theirs.

T-Mobile on the other hand, is much worse.

 

Not this again. Geez, you are a broken record, JoeJoeJoe. You need to put up, shut up, or move to somewhere that has wireless coverage that does not elicit your complaints.

 

One, Sprint is using its spectrum as intended. Sprint satisfied all of its buildout requirements (33 percent or 66 percent POPs) already 10-15 years ago. So, if you have issue with that, take it up with the FCC and its MTA/BTA geographic licensing schemes. But you had better have your time machine ready, since you will need to be a revisionist historian going back 20 years.

 

Two, Sprint has directly assisted other carriers in their rural buildout. Iowa Wireless, Viaero Wireless, Nex-Tech Wireless, and United Wireless are four of the very few carriers that have used PCS 1900 MHz (or AWS 2100+1700 MHz) spectrum to cover large segments of exclusively rural area. And two of those four carriers could not have done so without PCS spectrum from Sprint.

 

So, Joe, put your money where your mouth is. Try to gather financing for PCS buildout in your rural area. Approach Sprint for a spectrum lease -- Sprint would be happy to make that deal. But see that the business plan does not exist because the demand is probably not there.

 

AJ

[Fraydog]

Look at how much of the spectrum Sprint is actually using across the country, hardly any of it.

It looks like Verizon are AT&T are actually expanding their coverage to use theirs.

T-Mobile on the other hand, is much worse.

 

This doesn't have as much to do with spectrum in my opinion, as much as it has to do with money. After the Nextel disaster, Sprint didn't really have an option other than to retreat when it came to building out the rural areas. I'm not using that as an excuse, I'm merely stating what the facts are.

[S4GRU]

Look at how much of the spectrum Sprint is actually using across the country, hardly any of it.

It looks like Verizon are AT&T are actually expanding their coverage to use theirs.

T-Mobile on the other hand, is much worse.

 

Your hypocrisy has not been forgotten with this post. I have seen several posts from you where you complain about Sprint not deploying low frequency spectrum in rural West Washington. And now you think Sprint shouldn't have access to new low frequency spectrum?

 

Meanwhile, AT&T and VZW have low frequency spectrum to cover nearly the entire United States with one CDMA/GSM carrier, one EVDO/HSPA carrier and one LTE carrier, including Alaska, Hawaii and Puerto Rico. Yet, they haven't. Why not? And you want them to have more?

 

AT&T and VZW do not need more low frequency spectrum. They need more capacity. And high frequency spectrum will fit that bill just fine. Sprint has very little low frequency spectrum and Tmo has none. This disparity causes a reduction in competition.

 

Even if you want to go to VZW or AT&T for their better rural coverage, it's in your interest to make sure the competition has ample access to spectrum to remain viable competitors. We all gain from a competitive market, no matter who you subscribe to.

 

In reality, AT&T and VZW have enough rural spectrum for 30-50 years, nationwide. This is all about urban spectrum. AT&T and VZW want low frequency spectrum because it allows them to more cheaply deploy spectrum over a broader area. They have wide tower spacing in places they have Cellular and 700 spectrum. Adding additional carriers on just these towers is very cheap. They want that, and pocket the difference. Meanwhile, their competitors don't have this luxury. And have higher deployment, network upgrade and operational costs per subscriber.

 

It's unfair, especially when you consider it's a public resource. And if AT&T or VZW were value carriers and thus giving the public a benefit of their reduced network costs with wider tower spacing with low frequency spectrum, then it could almost be a defendable position. However, they pocket all those savings, and charge a premium for those services. All with a public resource. It's disgraceful, and attitudes like yours will only contribute further to this problem and harm fair competition.

 

Robert via Nexus 7 with Tapatalk HD

[Bob Newhart]

Your hypocrisy has not been forgotten with this post. I have seen several posts from you where you complain about Sprint not deploying low frequency spectrum in rural West Washington. And now you think Sprint shouldn't have access to new low frequency spectrum?

 

Whoa there Nelly.

 

I'm wanting Sprint to deploy their 800 Mhz (900 too?)) in all their markets that they own that spectrum.

That is a large reason why I still am a Sprint customer, in anticipation of expanded voice coverage in my area.

 

I think all cell companies should 'use it or lose it'. If they don't use their spectrum they should have it taken off them.

Looking at the ownership spectrum maps, Sprint and T-Mobile are the biggest offenders of this of the big four companies.

 

The spectrum not used by the cell companies can be used for other purposes in rural areas.

[dedub]

I think all cell companies should 'use it or lose it'. If they don't use their spectrum they should have it taken off them.

 

I agree here, and it should apply consistently across all carriers and locations.

 

Further, I think there should be some kind of dissuasion or punishment (fines or whatnot) for 'protection sites' type behavior designed to meet only the minimal coverage with no active plans to build out fully.

[S4GRU]

Whoa there Nelly.

 

I'm wanting Sprint to deploy their 800 Mhz (900 too?)) in all their markets that they own that spectrum.

That is a large reason why I still am a Sprint customer, in anticipation of expanded voice coverage in my area.

 

I think all cell companies should 'use it or lose it'. If they don't use their spectrum they should have it taken off them.

Looking at the ownership spectrum maps, Sprint and T-Mobile are the biggest offenders of this of the big four companies.

 

The spectrum not used by the cell companies can be used for other purposes in rural areas.

 

I agree with this philosophy. But your post did not say this. You were basically saying that AT&T and Verizon shouldn't have to meet this type of requirement if they are allowed to participate in the 600MHz auction without restriction. Because AT&T and VZW are sitting on boatloads of unused spectrum, especially in secondary, tertiary and rural markets. I agree they should lose it too. This is something AJ has been advocating for a long, long time.

 

Robert

[S4GRU]

I agree here, and it should apply consistently across all carriers and locations.

 

Further, I think there should be some kind of dissuasion or punishment (fines or whatnot) for 'protection sites' type behavior designed to meet only the minimal coverage with no active plans to build out fully.

 

You cannot punish existing license holders over protection sites. They were just meeting the guidelines that the FCC set forth. They agreed to meet the service requirements when they bid. If the requirements were more stringent, the amount paid would be less.

 

However, I do believe the current FCC requirements for build out are woefully inadequate, and should be much more stringent. And after 10 years, on existing licenses, the FCC should increase the build out requirements further to something more reasonable, or allow that spectrum to be put back out there to be used by someone else. But this would likely require congressional action.

 

EDIT: Another thought that comes to mind is to make a formula that highest price does not win, but bidders have to bid not only on price but POP percentage covered. So if carrier wants to bid $1 Billion, but 90% POP's covered in 5 years, that would beat out a $3 Billion bid with 30% POPs covered in 5 years.

 

Robert

[Fraydog]

There's no use it or lose it in play with SMR the buildouts should all be satisfied a long time ago. Seriously it didn't occur to you Nextel was using it for a long time

[dedub]

There's no use it or lose it in play with SMR the buildouts should all be satisfied a long time ago. Seriously it didn't occur to you Nextel was using it for a long time

 

I think that is the point, there is not any use or lose it, but there should be.

 

And as far as I am concerned, that includes all spectrum, not just cell.

 

As has been mentioned many times, spectrum is a public resource. When a resource is not being used, there should be laws/regulations/policies to govern the recovery and reassignment/repurposement of that resource.

[WiWavelength]

I think all cell companies should 'use it or lose it'. If they don't use their spectrum they should have it taken off them.

Looking at the ownership spectrum maps, Sprint and T-Mobile are the biggest offenders of this of the big four companies.

 

Joe, you are posting from a position of ignorance. It is as if you did not even read my previous response.

 

The FCC has already provided a mix of different license construction requirements so that the requirements suit the particular spectrum propagation characteristics and that licensees can choose the particular spectrum and requirements that fit their business models.

 

Below are the construction requirement bases for the major spectrum bands currently in use...

 

Cellular 850 MHz: geographic area

PCS 1900 MHz: population

SMR 800 MHz: population

AWS 2100+1700 MHz: population

Lower 700 MHz: geographic area

Upper 700 MHz: population

 

Cellular 850 MHz and Lower 700 MHz are "use it or lose it" based on geographic area. But it would be infeasible to apply the same to higher frequency spectrum, such as PCS and AWS, especially as those individual licenses often cover multiple states. So, your inaccurate example of Sprint and T-Mobile demonstrates that you do not understand the FCC licensing schemes, nor the balance that must be struck between allowing a wireless carrier to assemble a competitive footprint and enabling a wireless carrier to hoard spectrum.

 

The spectrum not used by the cell companies can be used for other purposes in rural areas.

 

As I said before, put your money where your mouth is. Assemble a workable business plan for serving rural areas. Sprint, for one, will almost certainly be happy to sell you partitioned and disaggregated spectrum, as it has with other rural carriers. Thus, your assumption that rural carriers cannot get access to spectrum that national carriers hold but do not use is proven false.

 

AJ

[dedub]

Assemble a workable business plan for serving rural areas. Sprint, for one, will almost certainly be happy to sell you partitioned and disaggregated spectrum, as it has with other rural carriers.

 

It should not be up to sprint (or any other carrier) to sell/lease off unused spectrum.

 

Un-utilized spectrum should be returned to the public/government. Full stop.

 

Parties interested in utilizing unused spectrum, should then apply for it to the government.

 

All of these spectrum swaps and sales/leases that occur these days is the opposite of how it should be done.

 

I realize that nothing any of us say will affect anything, it is up to the applicable government entities to determine policy etc.

[WiWavelength]

It should not be up to sprint (or any other carrier) to sell/lease off unused spectrum.

 

Un-utilized spectrum should be returned to the public/government. Full stop.

 

Parties interested in utilizing unused spectrum, should then apply for it to the government.

 

All of these spectrum swaps and sales/leases that occur these days is the opposite of how it should be done.

 

I realize that nothing any of us say will affect anything, it is up to the applicable government entities to determine policy etc.

 

What you are advocating, dedub, is taking away spectrum from licensees that have paid for it, then giving it away (for free?) to interested parties in rural areas. Your argument is seemingly based on the supposed fact that said licensees are not "utilizing" the spectrum. Ah, but they are. They are meeting the requirements set forth in the rules and regulations established before they acquired the spectrum. That they do not offer service over every single square mile of licensed area does not mean they are not effectively "utilizing" their spectrum as intended.

 

As for the secondary market (i.e. spectrum sales/swaps) argument, anyone who knows my posting history recognizes that I am hardly a capitalist free market apologist. If anything, I am far closer to a flaming socialist liberal. But the secondary market firmly exists, is relatively vibrant. That larger carriers hold spectrum "unutilized" in rural areas, yet interested parties have not come forward and acquired that "unutilized" spectrum, well, that shows -- to at least some extent -- that feasible business models may not exist for that "unutilized" spectrum in those markets.

 

AJ

[dedub]

I'm suggesting that licensees that have paid for spectrum that are not using (or under utilizing it), forfeit their license, returning it to the public pool.

 

Other parties interested in utilizing available spectrum in the pool, would not get it for free, they would have to buy it from the government just as the previous licensees had. They would also be liable to forfeit it if they do not properly utilize or under utilize the resource.

 

Since these under-served areas may have 'feasibility' issues, there ought to be discounts/lower costs required to purchase said licences in the first place.

[WiWavelength]

I'm suggesting that licensees that have paid for spectrum that are not using (or under utilizing it), forfeit their license, returning it to the public pool.

 

Many licensees in the past have voluntarily forfeit all/part of their spectrum licenses or had them confiscated. Per the current rules and regulations, though, VZW, AT&T, Sprint, and T-Mobile are all utilizing their spectrum. So, forfeiture/confiscation would not apply to them.

 

Other parties interested in utilizing available spectrum in the pool, would not get it for free, they would have to buy it from the government just as the previous licensees had.

 

So what that would really accomplish would be to move the secondary market into the hands of the FCC. How would that be an improvement?

 

It would also require that the FCC return some of the secondary market proceeds to the affected licensees. If not, the revenue gained at initial spectrum band auctions would decline because of the risk of loss of that spectrum. Not to mention, many largely rural licenses could go unsold.

 

AJ

[dedub]

This is not about the current rules. This is about what the rules should be.

 

If VZW/ATT/Sprint/TMO are all utilizing all of their spectrum, then what are we having this thread for?

 

Utilizing their spectrum within the current rules and regulations, and actually utilizing their spectrum so that utilization is passed down to end users, is 2 different things.

 

If the end users aren not able to be using it (within a reasonable time frame for deployment), then it should be forfeited, period.

 

As far as the secondary market, it would put the money for spectrum sales back into the taxpayers/governments pocket, instead of allowing corporations to profit (or not) on the use (or disuse) of public spectrum.

 

Forfeit being that the FCC does *not* give any refunds.

 

Ergo the phrase 'use it, or lose it'.

 

If companies aren't going to use, they shouldn't bid on it.

 

What good is sold rural licences that are not effectively used?

 

Better to be unsold and available to be used, than horded indefinitely by a company with no plans to further implement.

[WiWavelength]

This is not about the current rules. This is about what the rules should be.

 

Well, if you want to blow up the current system, then you can blow up spectrum licensing, too. The appropriate solution is not to license spectrum at all. It is a public resource. And it should be under the control of something along the lines of the "Wireless Network Corporation" -- a public entity that holds all spectrum and deploys all wireless infrastructure.

 

Then, all wireless "carriers" operate as MVNOs by purchasing capacity from the public entity. The "carriers" can compete on price and service, but not on coverage as they do now, like some sort of irrational system of parallel private highways.

 

So, if you want to talk pie in the sky, there it is. As for your other points, they overlook some important considerations. But I will have to address those later when I have more time...

 

AJ

[S4GRU]

Well, if you want to blow up the current system, then you can blow up spectrum licensing, too. The appropriate solution is not to license spectrum at all. It is a public resource. And it should be under the control of something along the lines of the "Wireless Network Corporation" -- a public entity that holds all spectrum and deploys all wireless infrastructure.

 

Then, all wireless "carriers" operate as MVNOs by purchasing capacity from the public entity. The "carriers" can compete on price and service, but not on coverage as they do now, like some sort of irrational system of parallel private highways.

 

So, if you want to talk pie in the sky, there it is. As for your other points, they overlook some important considerations. But I will have to address those later when I have more time...

 

AJ

 

Wow, man. That some pink commie sounding wireless network. You can't do that, man. What about Randall Stephenson, man? Have you even thought about him? What about his needs and wants? You're cold and callous, man.

 

In all seriousness, I don't know if I would want to go to quite that extreme. I like the concept, but I would feel more comfortable with something a little more private that ensures competition for the sake of technology progression...then I could be persuaded. The current system of spectrum management is fundamentally flawed to the core and something drastic should be done to change it in the long term. But your suggestion in it's most pure form hurts my progressive Libertarian sensibilities.

 

Robert

[lynyrd65]

 

Wow, man. That some pink commie sounding wireless network. You can't do that, man. What about Randall Stephenson, man? Have you even thought about him? What about his needs and wants? You're cold and callous, man.

 

In all seriousness, I don't know if I would want to go to quite that extreme. I like the concept, but I would feel more comfortable with something a little more private that ensures competition for the sake of technology progression...then I could be persuaded. The current system of spectrum management is fundamentally flawed to the core and something drastic should be done to change it in the long term. But your suggestion in it's most pure form hurts my progressive Libertarian sensibilities.

 

Robert

 

We're already doing fine keeping him up at night with all this unlimited data talk. He might just collapse in shear terror at this public infrastructure talk...........

 

 

Keep it up

 

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