Are spectrum caps set to make a comeback? They are if some rural trade associations have their way.
The Rural Telecommunications Group this week filed comments with the Federal Communications Commission asking that regulators set firm limits on the amount of spectrum a single company can own, with that amount varying by spectrum band. The filing was in response to a request by the FCC in regards to future spectrum management.
The RTG is asking that regulators limit licensees to 25% of all “available and usable mobile broadband spectrum in any given county with no carrier permitted to hold more than 40% of all available and usable spectrum in any given county below 1 GHz.” The trade association four years ago had asked that the FCC prohibit a wireless operator from controlling more than 110 megahertz of spectrum below the 2.3 GHz band in any one market. That limit would preserve Clearwire’s current holdings in the 2.5 GHz band that amount to more than 150 megahertz of spectrum in some markets.
The RTG also asked that if accepted, the FCC require companies in excess of the provision be given 18 months to divest the required spectrum holdings, or be allowed to keep those licenses if they agree to provide data roaming at that nebulus “reasonable terms and conditions;” offer fully interoperable mobile devices; and offer smaller operators access to all devices at the same time they are available to tier-one carrier customers.
“This combination of divestitures and grandfathering will help ensure that the benefits of the proposed spectrum aggregation limits are experienced by consumers both immediately and in the future,” the organization noted in its filing.
The Competitive Carrier Association followed suit, filing its own comments with the FCC asking for reform of the current spectrum screen used by regulators in deciding on mergers and acquisitions across the mobile space. The CCA notes that the screen needs to take into account differences between spectrum in “high and low frequency bands.”
“The spectrum screen is deeply flawed, and I am pleased the FCC has recognized the urgent need to reform the current system,” noted Steven Berry, president and CEO of CCA. “The FCC should take this opportunity to strengthen the current spectrum screen to preserve entry incentives and address increasing concerns of a growing duopoly. Under the current regime, AT&T and Verizon have been allowed to aggregate significant amounts of spectrum without an immediate need and avoid necessary competitive scrutiny. The FCC has an obligation to end these practices.”
It should be noted that neither AT&T Mobility nor Verizon Wireless are members of CCA.
The FCC rolled back previous spectrum caps in 2003 that limited wireless carriers from controlling more than 45 megahertz of spectrum across urban markets, which was later increased to 55 megahertz. The cap was originally instituted in 1994, prior to the 1.9 GHz, PCS auctions. Since the cap was eliminated, government regulators have relied on a so-called “spectrum screen” to ensure that one operator does not control a monopolistic portion of spectrum in a given market.
Opponents to a cap note that the wireless industry is vastly different today than it was 10 years ago, noting that consumer demand for mobile data services and growing customer base requires a greater need for spectrum resources. A recent analyst report found that AT&T Mobility controlled 78 megahertz of spectrum below the 2 GHz level; Verizon Wireless controlled 100 megahertz; Sprint Nextel 49 megahertz; and T-Mobile USA 48 megahertz. There are a number of deals currently pending that would see those levels increase.
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