AT&T, Verizon beat back limits on airwaves auction

Allan Holmes

The Federal Communications Commission handed Verizon Communications Inc. and AT&T Inc. a victory Thursday when it agreed on a plan to auction valuable radio signals next year that will allow the two giant carriers to bid on most of the frequencies expected to be up for sale.

The agency was under pressure by consumer groups and smaller wireless carriers such as T-Mobile Inc. and Sprint Corp. to cap the amount of spectrum the wireless giants could buy so as to ensure competition in the industry.

The commissioners voted 3-2 along party lines to reserve just part of the airwaves being auctioned for small wireless carriers, rather than establishing a hard cap on how much spectrum Verizon and AT&T can purchase.

The airwaves that will be sold are those now held by broadcast TV stations in the 600 megahertz range, so-called low-band spectrum that is highly coveted because it can travel long distances and penetrate buildings, characteristics that make it ideal for wireless devices

The FCC plans to run a reverse auction to determine how much broadcasters are willing to sell their airwaves for. No one knows how many broadcasters will sell.

At stake is who will ultimately control the public’s wireless access to the Internet, on which all kinds of data — from medical records and bank transactions to Amazon purchases and movie downloads — travel from providers to smartphones and tablets.

The Center for Public Integrity reported on the upcoming spectrum auction in March.

Verizon and AT&T, which count two-thirds of all U.S. wireless subscribers as customers, control about 74 percent of the low-band spectrum, below 1 gigahertz. If the companies buy more in the 600 megahertz band, wireless experts believe the companies will have an unfair competitive advantage against Sprint Corp., the third-largest wireless carrier, and T-Mobile USA Inc., the fourth largest.

If Sprint and T-Mobile aren’t able to buy enough low-band spectrum in next year’s auction, they may be forced to merge to compete, putting upward pressure on wireless prices and stifling innovation.

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Copyright 2014 The Center for Public Integrity. This story was published by The Center for Public Integrity, a nonprofit, nonpartisan investigative news organization in Washington, D.C.