As expected, the Federal Communications Commission has voted to restrict the amount of spectrum Verizon Communications and AT&T will be able to buy in the 2015 auction of spectrum in the 600-MHz band that formerly was used for TV broadcasting.
Assuming 85 MHz to 100 MHz eventually is freed up for reallocation, no more than 30 MHz might be reserved for smaller bidders, including Sprint and T-Mobile US.
On the other hand, the Commission also adopted rules that will make it harder for Sprint to acquire T-Mobile US.
The Commission changed its “spectrum screen” rules used to evaluate mergers and acquisitions in the U.S. mobile business, with the biggest impact on Sprint.
The FCC has indicated it will add about 101 megahertz of Clearwire spectrum to Sprint’s total spectrum holdings, for purposes of determining Sprint’s spectrum position in specific markets.
In some cases, that will trigger a review in which higher acquisition or merger scrutiny occurs, because Sprint will have 33 percent or more of the available mobile broadband spectrum in some markets.
The spectrum screen is the way the Federal Communications Commission accounts for existing spectrum market share when creating bidding rules. Up to this point, much former Clearwire spectrum has not been counted against Sprint’s total spectrum holdings.
The new screen would mean Sprint exceeds a threshold of about a third of all spectrum in specific markets.
“If a proposed transaction would result in a wireless provider holding approximately one third or more of available spectrum licenses in a given market, that transaction will continue to trigger a more detailed, case-by-case competitive analysis by the Commission,” the FCC said.
That rule change does not affect Sprint’s ability to bid on the set-aside 600-MHz spectrum, though.
On the other hand, the Commission also now makes a distinction between “lower band” (below 1 GHZ) spectrum and “higher band” spectrum (above 1 GHZ) ownership when evaluating potential mobile mergers or acquisitions.
Potential deals by firms with more than a third of total spectrum in the lower bands (AT&T and Verizon, primarily) will face higher merger or acquisition scrutiny.
So AT&T and Verizon are “losers,” in the sense that they cannot win perhaps 30 percent of the 600-MHz spectrum. On the other hand, the set-asides were not more extensive.
Both Sprint and T-Mobile US are winners in the sense that they will eventually be able to bid on up to 30 MHz of spectrum without facing competition from AT&T and Verizon.
But Sprint got one more warning that any effort to buy T-Mobile US is going to face heightened scrutiny.
Edited by
Maurice Nagle 
QUICK LINKS 
