A group of competitive carriers led by Sprint and T-Mobile have formed a new coalition but, based on the group’s opening advocacy salvo, I don’t expect much in the way of any new or insightful arguments. For example, they have revived the old myth that AT&T and Verizon were awarded half of their low band spectrum “for free” – a claim that has been so thoroughly refuted I’m surprised it’s still treated as news.
But it is. So, it’s time for some old fashioned fact-checking.
Contrary to claims that much of AT&T’s low-frequency spectrum holdings were given to AT&T in the mid-1980s, the fact is that AT&T acquired nearly 97 percent of its low-frequency spectrum at auction or through secondary market transactions. AT&T’s ultimate predecessor, Southwestern Bell, was originally assigned Cellular B-block licenses in only a small number of license areas covering portions of only five states. As of last May, when AT&T filed a detailed ex parte on this issue, those original licenses represented about 3.5 percent of the low-frequency spectrum AT&T held in the top 100 cellular market areas (CMAs – as measured by MHz-POPs), and only about 3.3 percent of AT&T’s total low-frequency spectrum in all CMAs.
AT&T acquired the rest of its 850 MHz licenses through a $41 billion dollar transaction with AT&T Wireless, even larger transactions with Ameritech and BellSouth, and numerous purchases from a number of other companies. AT&T acquired its Lower 700 MHz spectrum through its $6.6 billion of winning bids in Auction 73 – an auction in which Sprint and T-Mobile were eligible to participate, but did not – as well as billions of dollars of additional spectrum-only acquisitions from a variety of companies that won spectrum in the Commission’s 700 MHz auctions but decided to sell it for a profit as opposed to build it out. Indeed, many of those companies are small carriers that are now complaining about the lack of low band holdings. We’ve blogged about that as well.
Sprint and T-Mobile of course have had ample opportunities to acquire and maintain low-frequency spectrum. For example, Sprint acquired Centel in 1993, which held 850 MHz licenses covering almost as much of the population as the licenses originally assigned to Southwestern Bell. In 1996, however, Sprint made a business decision to spin off Centel’s cellular operations so it could focus on deploying PCS spectrum instead.
And even though T-Mobile sat out the 700 MHz auction, it purchased a huge swath of 700 MHz A-block spectrum on the secondary market, a footprint which covers 70 percent of T-Mobile’s customer base. The deal gave T-Mobile low-frequency spectrum in 21 of the top 30 U.S. markets, including New York, Los Angeles and Washington. This low band spectrum footprint covers an area with 158 million potential customers.
I expect that none of this will stop the coalition from continuing to complain about the alleged “free” spectrum give-away that it insists happened in the 1980s. Indeed, given the extensive regulatory record developed last year on these issues, pretty much every argument this new coalition is making has been made and rebutted multiple times. But they don’t seem to be particularly interested in the facts.