US operators disagree over spectrum ownership limits

AT&T, T-Mobile and Dish have all expressed views that there should be changes to the rules on how much spectrum one operator can own – but differ in their estimations of what’s fair.

As reported by Light Reading, US regulator the FCC is now looking into the matter of how much midband spectrum – which is more widely accessible for general 5G usage than the faster but shorter ranged mmWave – operators can accumulate. This was seemingly prompted by complaints AT&T have been making for a while in part relating to acquisitions made by T-Mobile and subsequent spectrum gains.

The FCC said: “We seek comment on AT&T’s request that the commission apply ‘enhanced factor review,’ as it currently does for below-1-GHz spectrum, to any acquisition of unpaired midband spectrum … that would cause a service provider to hold more than one third of the total amount of midband spectrum available.”

While agreeing that the rules need looking at, T-Mobile position is somewhat different. It’s filing to the FCC stated:

The Commission’s current spectrum holdings policies and rules are unquestionably out of date and in need of reform. Moreover, the various spectrum screens are now being used to impede competition rather than to prevent foreclosure of competition. For these reasons, TMobile supports a fresh look at the Commission’s spectrum holdings policies and rules.

AT&T’s Petition, however, is not a rational starting point for reexamining the Commission’s spectrum aggregation policies. AT&T’s proposal for a new mid-band screen was filed two years ago and concocted as a self-interested measure to restrict T-Mobile’s ability to participate in then-upcoming mid-band spectrum auctions. Subsequently, AT&T acquired a major share of spectrum assets in both the C-band auction and the 3.45 GHz auction, clearly refuting the fanciful central hypothesis in its Petition that T-Mobile has either the incentive or ability to foreclose AT&T from acquiring mid-band spectrum.

Dish’s filing to the FCC meanwhile suggested establishing a national screen of 25% to bolster the competitiveness of four carriers in the US.

The excessive spectrum concentration among incumbent carriers raises costs for other competitors, including DISH, and inhibits them from competing on a level playing field. DISH therefore supports opening a rulemaking to examine appropriate spectrum holding policies. The new rulemaking should examine updating the spectrum screen (including taking into account spectrum contiguity), and should structure clear and effective presumptions and divestiture remedies for transactions that are predicted to harm competition and consumers because they would exceed one of the screens.

The Commission should establish a national screen of 25%. Such a screen is consistent with the objective of a mobile voice and broadband market with at least four nationwide carriers. Exceedance of that screen should not only justify heightened review; it should create a rebuttable presumption of denial of any transaction that results in (or starts from) such an exceedance.

Each position listed in filings past and present contain a lot of technical minutia, but as a broad view while all three operators seem agreed that there should be some rule changes with regards to how much midband spectrum any individual operator can stuff into its network, there is no such consensus on exactly what they should be altered to.

It’s a fiddly argument to parse, and no doubt the precise postures each operator has taken will align neatly with what suits them and their market positions. However with midband being integral to widespread coverage of 5G, it’s clearly an important issue with regards to who gets how much of it going forwards.

The FCC’s job on paper will presumably now be to weigh up each position and combined with additional external input extract the arguments that make most sense from a market perspective, as opposed to any self-serving one. How that will land we will have to wait and see, though as with any regulatory head-scratching it won’t be an overnight process.

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