Debating spectrum limits

AT&T CEO Randall Stephenson opened the door to possible company limits in the upcoming federal auction of broadcast spectrum. Until now, AT&T and Verizon had opposed efforts by T-Mobile and Sprint to put any limits on how much spectrum one company could acquire in the auction.

Speaking at the UBS Global Media & Communications Conference, Stephenson said, "We would be supportive of rules around the auction that would limit the amount of spectrum any one company could garner." That is, provided all participants were bound by the same rules. However, the AT&T chief warned that the increasing restrictions could reduce the overall amount of federal revenue and would increase the risk of failure.

Meanwhile, the Senate Committee on Commerce, Science, and Transportation held a hearing on the subject, Crafting a Successful Incentive Auction: Stakeholders’ Perspectives. There, the issue of fair limits that would apply to all bidders seemed to be achieving a consensus. Committee co-chair Senator John Thune (R-SD) said:

“Instead of exploring auction rules to arbitrarily limit or benefit certain carriers, the FCC has the ability to consider setting a limit on the amount of spectrum any single bidder can win in the incentive auction. Such a limit, applying equally to every bidder, would at least allow all companies to have a fair shot at acquiring the spectrum they need while preventing any single entity from winning all the licenses.”

In his remarks, Steven K. Berry of the Competitive Carriers Association – the association of Sprint, T-Mobile, and smaller wireless companies – agreed that the industry and government were inching toward consensus. “Based on AT&T's comments,” said Berry, “we may be finding common ground.”

And Harold Feld of Public Knowledge also came out for “an auction plan that would prohibit any one company from acquiring too much spectrum.”

But of course, the devil is in the details. What are the limits? Will they allow spectrum-constrained AT&T and Verizon to purchase enough spectrum? And how will they be enforced?  And most important, limits must not create disincentives for broadcasters to put their unused spectrum up for auction. That would risk auction failure.

Gary Epstein, FCC panelist, added that the FCC will take all comments filed in the record into account in crafting rules that meet the statutory objectives of the auction: alleviate spectrum constraints, fund the public safety network FirstNet; pay for repacking of broadcast stations; contribute revenue to deficit reduction; protect broadcast consumers; and spark innovation.

Speed Matters wants auction rules that protect consumers, workers and the entire industry as well. But, as Randall Stephenson said, this is “still going to be a heroic effort to get this put together.”

Stephenson: AT&T would accept limits to spectrum purchases during incentive auctions (Fierce Wireless, Dec. 10, 2013)

Crafting a Successful Incentive Auction: Stakeholders' Perspectives (Senate Commerce Committee, Dec. 10, 2013)