Need for New Spectrum Cap Disputed in Filings at FCC
AT&T and Verizon Wireless called on the FCC to reject calls by the Rural Telecommunications Group and other small carriers for a new spectrum cap. The request came in reply comments on RTG’s July petition seeking to restore a modified version of the cap which the FCC did away with in 2001 in favor of a screen the agency uses in conducting merger reviews. The nation’s two biggest carriers said the record shows competition is working. RTG countered in its reply that 15 of 21 parties that filed in the original comment round support a cap.
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In July, RTG asked the FCC to impose a cap of 110 MHz on the amount of spectrum a carrier can hold below 2.3 GHz in any county. RTG said last week the FCC should not base its view of the general competitiveness of wireless markets on the FCC’s recent 12th CMRS Competition Report, evidence cited by major carriers in their filings. The FCC report does not take into account the events of 2008 including what RTG called the “’sonic boom'” of blows to CMRS competition,” - Verizon Wireless’s acquisition of Alltel, the group said. “The CMRS competitive landscape has changed considerably,” RTG said.
RTG said there’s plenty of spectrum in rural America, but too little is in the hands of small carriers. “Due to spectrum warehousing by larger carriers, spectrum allocated by the Commission for the purpose of serving the most remote rural areas of this nation is not being used for such purpose,” RTG said. “A spectrum cap will thus result in an additional public interest benefit by creating a deterrent to such warehousing.”
“While RTG and its supporters baldly assert that imposing a cap is justified by competitive conditions, they provide no real evidence contradicting the Commission’s own findings that the mobile market is robustly competitive,” AT&T countered. No small carriers have demonstrated that they can’t meet their customers’ needs because they don’t have enough spectrum, AT&T said. Small carriers also “offer no evidence of any harms that would be redressed by rationing spectrum, and they cite no basis for concluding that the existing system of case-by-case review is not working,” AT&T said.
Verizon Wireless agreed with AT&T. “The Commission properly repealed the spectrum cap seven years ago and, as Verizon Wireless and others have demonstrated in their comments on the Petition, RTG has failed to provide any basis for the Commission to consider re-imposing such a constraint,” it said.
The Rural Cellular Association said spectrum warehousing is a major concern and the FCC should impose a new cap. Too often big carriers buy licenses covering rural markets but do not offer service in the most of the areas covered because of “minimal” FCC build-out requirements, RCA said. Instead, major carriers “cherry pick” cities and the easiest areas to serve but ignore rural areas, the group said. But RCA said a cap alone would do little to get more spectrum in play. “At the very least, carriers looking to acquire spectrum via auction, acquisition, or any other means should be required to provide a county-by-county breakdown of the amount of spectrum they currently use to offer commercial services, as well as a description of the commercial services the carrier is providing on the used portion of the spectrum; the amount of licensed spectrum the carrier holds in the county that remains unused; and, a detailed statement about the proposed future use of any unused spectrum,” RCA said.
The Public Interest Spectrum Coalition sided with small carriers and disputed arguments of major carriers that wireless markets remain competitive. “The market for wireless services has changed substantially since the Commission’s 2001 revocation of spectrum caps,” PISC said. “An endless series of corporate mergers and constant allegations of unfair dealings in negotiations over roaming arrangements have produced a downward spiral of consolidation and abuse of market power.”