By Lawrence R.  Krevor, Vice President - Spectrum, Legal and Government Affairs
July 23, 2013
Preserving Competition Through Fair Spectrum Auction Rules 

Two years ago the American wireless industry was on, as then Federal Communications Commission Chairman Julius Genachowski called it, “the doorstop of duopoly”, the results of which would have  changed the competitive landscape.
Instead, in 2013, with a newly approved investment from SoftBank Group Corp and recent acquisition of Clearwire, Sprint will be better able to serve wireless consumers, hold market leaders accountable through strengthened competition, and continue to drive innovation in the American economy.
As Acting FCC Chairwoman Mignon Clyburn observed upon approval of these transactions,

“Today is a good day for all Americans who use mobile broadband services.  After thorough review, the Commission has found that the proposed SoftBank Group Corp-Sprint-Clearwire transactions would serve the public interest.  The increased investment in Sprint’s and Clearwire’s networks is likely to accelerate deployment of mobile broadband services and enhance competition in the mobile marketplace, promoting customer choice, innovation and lower prices.”
And Sprint has backed up Chairwoman Clyburn’s assertions.  Just a few days following FCC approval of the SoftBank Group Corp and Clearwire transactions, we demonstrated our commitment to these principles with the launch of new Unlimited Guarantee Pricing Plans. With this new offering, customers are guaranteed unlimited talk (domestic calls to any wireline or mobile phone), text and data while on the Sprint network, for the life of the line of service and as little as $80 per month.
This is just the beginning of a brighter wireless future.  Sprint is committed to helping America take more steps towards that brighter future, helping lawmakers and regulators establish pro-competitive, forward-looking policies that include:
  • Efforts to advance competition:  Incentive auction rules should encourage auction participation and maximize competitive bidding, with reasonable protections that limit the ability of the two dominant carriers to acquire all of the 600 MHz spectrum that is uniquely well-suited to building nationwide wireless broadband networks.   Without competition for this last available beachfront spectrum, it could be acquired at below-market rates which would reduce revenues for building the FirstNet public safety wireless broadband network and the U.S. Treasury, while undercutting the availability of wireless broadband alternatives for American consumers. 
  • A realization that all spectrum is not created equal: Incentive auction rules must be based on a truly impartial and holistic evaluation of the various spectrum bands. Any competitive tool the Commission adopts must recognize the unique competitive value and effectiveness of below 1 GHz spectrum.
AT&T itself has acknowledged this.  At a 2012 Fortune Brainstorm Tech event, Chairman and CEO Randall Stephenson stated that “[O]ne of the beauties” of 700 MHz spectrum is that “it propagates like a bandit.  It takes fewer cell sites to get a good quality signal, both voice and data to you.” 
Today’s hearing on the 600 MHz incentive auction will feature one of the two dominant wireless carriers and its plans to disproportionately shut out other competitors from obtaining low-band 600 MHz spectrum, a concern the Antitrust Division of the Department of Justice anticipated. 
Fortunately for consumers, DOJ has already proposed that the FCC adopt reasonable spectrum aggregation limits to prevent this outcome.  Such limits, the DOJ concluded, “could improve the competitive dynamic among nationwide carriers and benefit consumers.”
The FCC can further that future by designing a 600 MHz incentive auction structure that supports competition, innovation and increased consumer benefits, while achieving the auction revenues necessary to support Congressional mandates. 
Sprint supports that goal; unfortunately, the two largest carriers do not.