Event Driven Takeaways
- Concerns of the FCC appear to be limited regarding whether Sprint/T-Mobile would be able to gain access to an inordinate amount of spectrum in auctions post-merger, based on Event Driven’s discussions with FCC officials. During its review of the deal, the commission will analyze how the merger will affect spectrum holdings.
- There are currently limits on how much spectrum one company can acquire in an auction, noted Erin McGrath, legal advisor to the office of Commissioner Michael O'Rielly. “We also have rules that are supposed to encourage small businesses to [participate in auctions] to try to offset the advantage that the larger companies would have.”
- The FCC has auctions planned for millimeter wave spectrum later this year. Although the FCC has set no dates set for the auction of mid-band spectrum, the agency has initiated a rulemaking process to reallocate parts of the 3.7 to 4.2 GHz band for mobile use. Millimeter wave and mid-band spectrum are both necessary for the deployment of 5G.
- Sprint controls critical mid-band spectrum assets, as it is the only U.S. operator to control more than 100 MHz of contiguous mid-band 2.5 GHz spectrum. An FCC official told Event Driven that this spectrum is actually leased to the company, meaning it a “slightly different model” of ownership that the FCC will need to consider. “It’s one of the things we’re looking at,” the official said.
FCC concerns appear to be limited regarding whether a combined Sprint/T-Mobile would be able to gain access to an inordinate amount of spectrum in auctions. As part of its review of Sprint/T-Mobile, the commission will assess the competitive impact of the merger, an examination that will include an analysis of how the deal will affect spectrum holdings.
There are currently limits on how much spectrum one company can acquire in an auction, noted Erin McGrath, legal advisor to the office of Commissioner Michael O'Rielly. “We also have rules that are supposed to encourage small businesses to [participate in auctions] to try to offset the advantage that the larger companies would have. It is something that we think about,” she told Event Driven.
Julie Knapp, chief of the FCC Office of Engineering and Technology, told Event Driven he had no concerns about one company acquiring a disproportionate amount of spectrum in the 3.7 to 4.2 GHz band, also referred to as the Citizens Broadband Radio Service band, or C-band. In July, the FCC
initiated a process to reallocate part of this mid-band spectrum for mobile use, a move that would open up a new spectrum resource for 5G. Of 150 MHz of spectrum in the C-band, 70 MHz will be auctioned for priority access licenses, Knapp said.
At the Mobile World Congress Americas conference in Los Angeles on Sept. 12, Umair Javed, legal advisor to the Office of Commissioner Jessica Rosenworcel, said during a panel that Rosenworcel’s office is getting to the point where it needs to determine whether “auction ideas that were so successful in the past” need to be recalibrated, “especially as our national providers grow bigger and fewer in number.”
“The power of using auctions as a redistributive tool becomes a little more complicated,” he added. “We’re wondering whether it’s time to update our auction playbook for 5G, and what would that look like.”
On Nov. 14, the FCC is
scheduled to auction millimeter wave spectrum in the 28 GHz band, which will be followed by an auction in the 24 GHz band. Millimeter wave spectrum is crucial for 5G deployment because its high throughput allows it to be used for high-speed wireless communications. However, the radio waves do not travel far, meaning that this spectrum is not something that can be used to create “great coverage to do rural deployments” of 5G, a person familiar with spectrum policy told Event Driven.
The radio waves of low-band spectrum, meanwhile, can travel much farther distances. Low-band spectrum is already in the hands of mobile carriers, the person familiar with spectrum policy said, and there are plans by T-Mobile and others to use that to deploy 5G networks. Although the FCC has set no dates for the auction of mid-band spectrum, the agency has initiated a rulemaking process to reallocate parts of the C-band for mobile use.
Mid-band spectrum is “what we think is the sweet spot,” the same person said. “It’s also the band that we think is critical if you’re going to do anything to make sure that 5G deployment in the United States isn’t just in urban corridors.”
As Event Driven has
previously reported, Sprint controls critical mid-band spectrum assets, as it is the only U.S. operator to control more than 100 MHz of contiguous mid-band 2.5 GHz spectrum. However, the company also has a smaller amount of low-band spectrum compared to other carriers, all of which argue that low-, mid-, and high-band spectrum are necessary for 5G.
As displayed in their
public interest statement to the FCC, Sprint and T-Mobile have asserted to regulators that their merger is necessary for the rapid deployment of 5G networks. But some who
oppose the merger, such as the Communications Workers of America and Free Press, have expressed concern that the transaction would result in extensive spectrum aggregation.
An FCC official told Event Driven that Sprint’s 2.5 GHz spectrum is actually leased to the company, meaning it a “slightly different model” of ownership that the FCC will need to consider. “It’s one of the things we’re looking at,” the official said. While Sprint may have a better position than others when it comes to the possession of mid-band spectrum, “the ultimate question” will be if that “overcomes the fact that they don’t have a lot of low-band. It’s all kinda fungible at this point,” the official added.
-- Alexandra Wilts