05.01.2013 11:33 AM
Justice Department wants to limit major telcos’ involvement in spectrum auctions
The DOJ has warned the FCC to place a cap on the amount of additional spectrum that AT&T and Verizon might acquire in the upcoming auctions.

Following a Justice Department (DOJ) recommendation to limit its involvement in the broadcast spectrum auction, telco AT&T says the FCC has no choice under the law but to reject it.

“Rigging the spectrum auctions to favor Sprint and T-Mobile would be unlawful,” AT&T told the FCC.

The DOJ has warned the FCC to place a cap on the amount of additional spectrum that AT&T and Verizon might acquire in the upcoming broadcast spectrum auctions.

“(The FCC) must ensure that the allocation of spectrum at auction does not enable carriers with high market shares to foreclose smaller carriers from improving their customers’ coverage,” the DOJ’s antitrust division told the FCC in a filing. “Today, the two leading carriers have the vast majority of low-frequency spectrum, whereas the two other nationwide carriers have virtually none."

In its response, AT&T said the DOJ’s recommendation urges the FCC to intervene to make sure Sprint and T-Mobile end up with the broadcaster’s spectrum so that they can “mount stronger challenges” to AT&T and Verizon.

“It is surprising that the Antitrust Division of the Department of Justice would even propose measures that are so nakedly designed to help specific companies,” wrote Wayne Watts, AT&T’s senior vice president and general counsel. “The Commission’s mandate under the Communications Act is to promote the competitive process, not to pick winners and losers in that process.”

The telco giant said the DOJ’s speculation about AT&T warehousing spectrum to shut out competitors is completely divorced from reality. “The Department’s spectrum hoarding theory is so far afield from the real world that it is hard to see the Department’s filing as anything but a naked plea for regulatory favoritism,” Watts wrote.

Instead of following the DOJ’s recommendation, AT&T said the FCC should adhere to its statutory mandate and conduct an open and competitive auction that awards spectrum to the highest bidder.

“That approach offers the best prospect for a successful auction that meets all of Congress‘ stated goals, including freeing up the maximum amount of spectrum for mobile broadband use, reducing the deficit and funding a nationwide public safety network,” Watts wrote. “It also would ensure the consumer benefits that would flow from putting this scarce resource to its best and highest use.”

AT&T said the record overwhelmingly supports spectrum aggregation policies that apply equally to all providers by employing a safe harbor spectrum screen that includes, and treats equally, all suitable available spectrum.

“A spectrum screen that acts as a true safe harbor, coupled with case-by-case review for transactions that exceed the screen, strikes the appropriate regulatory balance by providing marketplace certainty for transactions that leave a provider’s holdings below the screen, but permitting careful review of the competitive effects of a transaction that exceeds the screen,” Watts wrote.

“The Department’s contrary view of an auction that is designed to favor particular competitors would be unlawful and completely unwarranted as a matter of public policy and should be rejected.”



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