T-Mobile CEO Calls AWS-3 Auction 'Disaster' For Consumers

Urges FCC to alter that scenario for incentive auction

Before the FCC is carried off on the collective shoulders of Washington auction watchers for the record $45 billion raised in the AWS-3 auction, T-Mobile's CEO says the auction was a "disaster' for consumers, and does not want he FCC to repeat that scenario with the broadcast incentive auction.

That discouraging word came in a blog posting by John Legere, T-Mobile president and CEO.

He conceded that the auction was a financial success "many times over," But he said that "overall," it was a "disaster for American wireless consumers."

Why? "AT&T and Verizon showed that they can, and will, dig into their deep pockets to corner the market on available spectrum at nearly any cost," he said.

"To add insult to injury," he added, "the FCC’s rules actually allowed companies that don’t provide wireless service at all to buy up huge amounts of spectrum and sit on it for ten years! The results are not good for consumers. Three companies alone spent an insane $42 billion between them, grabbing a ridiculous 94 percent of the spectrum sold at this auction.

Those three were AT&T with $18 billion, Verizon with $10 billion, and Dish at $13 billion (the exact totals round up to $42 billion). T-Mobile got $1.2 billion worth.

T-Mobile wants the FCC to take several steps in the incentive auction to insure that spectrum is spread around,.

First, reject calls by AT&T and Verizon to delay the auction; second, reserve at least half of the available spectrum for sale to companies other than AT&T and Verizon, which it points out already has over two-thirds of the (low-band) broadcast spectrum; and third, don't allow it to be "collected and traded like financial securities."

The FCC had no comment, but an official speaking on background said that Chairman Tom Wheeler does support resserving spectrum in the incentive auction so the major carriers don't run the table on low-band spectrum, and points out that the incentive auction does have build-out requirments: New 600 MHz Band licensees have to build out to 40% of the population in their service areas within six years and 75% of the population by the end of their initial 12-year license terms and subsequent 10-year terms.