Verizon, AT&T clash with Sprint and others over spectrum caps

In comments to the Federal Communications Commission, AT&T and Verizon Wireless argued against rules that would reduce how much spectrum carriers can hold in certain markets. Meanwhile, smaller carriers pushed for proposals that would limit the spectrum holdings of the nation's two largest carriers.

The FCC is considering changes to its so-called spectrum-screen, which it uses when reviewing spectrum transactions. If a carrier acquires too much spectrum and violates the screen, the deal is more closely scrutinized. Currently, the screen is different for each proposed transaction. The FCC voted in late September to open up a review of its rules.

• Verizon said in its comments that the FCC should build on the strengths of the current system by including a "safe harbor providing certainty for transactions that do not exceed the screen, while enabling more detailed review of markets triggered by the screen for potential competitive harm." Verizon said the FCC should reject a spectrum cap "which is an inherently inflexible tool ill-suited to the dynamic spectrum market, and which can block spectrum transactions that are clearly pro-consumer."
• AT&T said the FCC should update the screen "to include all of the available spectrum that is 'suitable' for mobile wireless services," and specifically include spectrum that Clearwire (NASDAQ:CLWR) controls when it makes that consideration. AT&T also wants the FCC to "reaffirm that the 'safe harbor' provided by the screen is truly safe," meaning that the FCC "will not entertain spectrum aggregation-related challenges to any proposed spectrum acquisition that does not exceed the safe harbor level." The FCC also needs to update its screen to reflect the realities of the market, and the screen should reflect that it is "simply not realistic to assume that any holding of more than a third of the available spectrum in any market may create a risk of market foreclosure."
• In contrast, Sprint said Verizon and AT&T have aggregated around 75 percent of the spectrum for wireless below 1 GHz, and that the FCC should treat this spectrum differently. Sprint said the FCC "should adopt a cap for spectrum below 1 GHz that would apply prospectively to both commission spectrum auctions and secondary market transactions, including the incentive auction the commission will be conducting for broadcast TV spectrum.