US regulators officially closed the door on T-Mobile's request for more airwaves in the upcoming auction of TV broadcast spectrum set for next year.
All five commissioners on the Federal Communications Commission unanimously voted Thursday to stick with a "spectrum reserve" it adopted last year for the auction, tentatively scheduled for March. The FCC's move comes as little surprise since FCC Chairman Tom Wheeler signaled in June that the agency had not planned to increase the amount of spectrum it was setting aside for smaller players.
Spectrum is the set of licensed radio airwaves that allow carriers to ferry cat videos and Instagram selfies wirelessly from the Internet to your smartphone. Getting more spectrum is absolutely critical for carriers trying to meet that growing demand for data. Companies such as T-Mobile and Sprint have been pushing for the FCC to carve out more spectrum they could bid on, without have to go up against the deeper pockets of AT&T or Verizon. And while the FCC agreed last year to set aside some spectrum the smaller operators bid for, T-Mobile argued it needed more.
This auction is particularly important given that it is the first chance since 2008 for the wireless industry to get its hands on valuable low-frequency airwaves that allow signals to penetrate through walls more easily and travel longer distances. It is also the most complicated auction the FCC has ever designed as it attempts to entice TV broadcasters to sell their spectrum at the same time it will resell those spectrum licenses to wireless companies. The FCC has been working to finalize rules of the auction for months.
Despite the policy loss, T-Mobile CEO John Legere took to Twitter and played down the decision. Instead, he focused on the fact that the FCC had for the first time set aside any spectrum in an auction for smaller players, calling the move "unprecedented" and a "victory" for smaller competitors and consumers.
"Good news," he added. "The reserve includes great quality spectrum and looks like the @FCC will be monitoring closely so duopoly can't game the system."
He added that T-Mobile is committed to showing up for the auction and will play hard and be successful at the auction.
The Competitive Carrier Association, which represents T-Mobile and other small wireless providers, was not as upbeat about the vote. But CEO Steven Berry said it's a step in the right direction when it comes to encouraging competition in the auction and ultimately the market.
"While not as large as we had hoped, I thank Chairman Wheeler and the Commission for establishing a spectrum reserve of 30MHz, which is absolutely essential for competitive carriers' participation in the incentive auction," Berry said in a statement.
He continued, "Access to low-band spectrum is critical for competitive carriers, especially smaller carriers serving rural and hard-to-reach areas, and allowing these carriers the opportunity to purchase spectrum in their home markets is a huge win for consumers and competition."
In a blog post, AT&T's Joan Marsh, vice president of regulatory affairs, expressed relief that the FCC had put "to rest at last T-Mobile's never-ending quest to expand the favors it will receive at auction." She added that the FCC's decision was "long overdue" and essential to moving the process forward, and the Commission was right to reject T-Mobile's demands.
But she was still not satisfied with the ultimate outcome, stating that the framework the FCC adopted raises "significant questions about the value and utility of the spectrum that will be made available at auction."
The FCC's vote was the result of a compromise between Democrats on the commission, who wanted more restrictions on the larger carriers, and Republicans, who believed no restrictions should apply in the auction.