The FCC has finalized its proposed rules for next year’s 600 MHz spectrum auction and kept the reserve for smaller carriers at 30 MHz.
T-Mobile and others petitioned the FCC to raise the reserve to 40 MHz, but FCC Chairman Tom Wheeler believes the 30 MHz cap offers plenty of opportunity for those who may bid.
“The Incentive Auction offers one of the last opportunities for competitors to acquire significant quantities of low-band spectrum,” said Wheeler. “With more than 70% of low-band spectrum in the hands of just two providers, one of the Commission’s priorities is to ensure that multiple providers have a meaningful opportunity to acquire these valuable airwaves, which is critical to competition among wireless carriers. This is why the Commission voted to set aside this reserve a year ago. The draft Order concludes that the current reserve size of 30 MHz balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.”
AT&T and Verizon Wireless will not be allowed to bid on 30 MHz of the airwaves in each market, which will be set aside for companies with less scale and fewer resources. The FCC also proposed changes to how it handles bids from designated entities and will close a loophole exploited by Dish Networks earlier this year to score a discount on spectrum.
Dish relied on small companies to bid in its stead during the AWS-3 auction. Because the entities were under a certain size, they earned a 25% discount on the licenses that amounted to $3 billion. Dish’s competitors complained and the FCC said it will put new rules in place for the 600 MHz auction to prevent such misuse.
“We must also make sure that small businesses receiving credits are exercising independent decision-making authority. We will not allow small businesses to serve as a stalking horse for another party,” said Wheeler.
The FCC will vote on the rules during its next open meeting, scheduled for July.
