T-Mobile US clashes with AT&T, Verizon over AWS spectrum

T-Mobile US clashes with AT&T, Verizon over AWS spectrum

20 MAR 2014

T-Mobile US is calling for small blocks of AWS-3 spectrum to be made available when it goes under the hammer, but AT&T argues that US telecoms regulator FCC is on the right track by appearing to favour large blocks.

Joan Marsh, AT&T’s vice president of federal regulatory, noted in a recent blog that a draft for the AWS-3 auction is circulating for a vote at the FCC. “And while I have not seen the item,” she added, “early reports of its recommendations suggest to me that the commission staff has got this one exactly right.”

It is Marsh’s understanding that the proposed band plan includes two 10x2MHz EA (economic area) blocks and one 5x2MHz CMA (cellular market area) block.

AWS (advanced wireless services) spectrum covers pairings of frequencies in the 1.7GHz and 2.1GHz bands. An extra 50MHz is up for grabs in total in the AWS-3 auction – 25MHz on the uplink (1755-1780 MHz) paired with 25MHz on the downlink (2155-2180 MHz).

“Incorporation of the large block and licence sizes will not only ensure that the FCC drives the greatest efficiencies out of this spectrum, but also that it attracts the most revenue at auction,” said Marsh.

In a subsequent blog, Kathleen Ham, VP of federal regulatory affairs at T-Mobile US, said she wasn’t surprised that both Verizon and AT&T were advocating big blocks covering big geographic areas. But without enough small blocks and a mix of geographic areas, Ham voiced concern that the auction would “become a playing field for only Verizon and AT&T”.

“An auction with too many large blocks is a configuration that has the real potential to dissuade competitive carriers from participating in the auction,” she said. “By contrast, smaller spectrum blocks with a mix of large and small geographic areas will provide the greatest opportunity for a wide variety of bidders to participate and obtain licenses that match their licensing needs.”

T-Mobile US would like to see the AWS-3 spectrum divided into as many 5×5 megahertz blocks as possible. Ham thinks this will bring in more bidders and increase auction revenues.

“If the commission nevertheless believes some bidders would benefit from the ability to purchase spectrum in a 10×10 megahertz block,” she continued, “it should include no more than one such large block in the AWS-3 band plan given the significant countervailing benefits of making the spectrum available in 5×5 megahertz blocks.”

AT&T’s Marsh argued that the way the AWS-1 auction unfolded in 2006 supports her view. Even then, when operators had “very little awareness of the data tsunami headed their way”, Marsh pointed out that it was the large block, coupled with its large size – the regional economic area grouping (REAG) licence – that “attracted the most interest [and dollars]”.

Ham dismissed Marsh’s AWS-1 argument for “several reasons”. One of which, she said, was the “inappropriate comparison” of revenue generated from AWS-1 REAG licenses and AWS-1 CMA licences to show that larger licence sizes should be preferred.

“FCC is not considering the use of REAGs in this auction,” said Ham. “A more apt comparison is between the A and B Blocks in the AWS-1 auction – licences for the same amount of spectrum but licensed on EA and CMA bases – precisely what is under consideration in this auction. Those results show little difference between revenue from EA ($0.43/MHz/POP) and CMA ($0.39/MHz/POP) licences.”

As far as Marsh is concerned, however, the proposed 10x2MHz EA licenses “may be the last big opportunity for the commission to drive spectral efficiencies through auction structure, as the 600MHz auction structure demands 5 MHz fungible blocks”.

Auction of 600MHz spectrum is expected mid-2015.

Author

Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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