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DOJ piles on FCC’s Wheeler to increase auction spectrum reserve

The Department of Justice is adding to the pressure on Federal Communications Commission chairman Tom Wheeler to set aside a larger spectrum reserve in the broadcast incentive auction for bidders other than AT&T and Verizon.

Writing to Wheeler, William Baer, the assistant attorney general for the DOJ, implored the chairman to use the broadcast incentive auction policies “to ensure that wireless carriers, other than those that currently hold the majority of low-frequency spectrum, have a meaningful opportunity to acquire the spectrum necessary to foster a competitive wireless market.”

The auction, planned for early 2016, will make available scarce and coveted low-band spectrum, ideal for mobile devices.  Smaller carriers like T-Mobile are trying to compete with the big two dominant wireless providers which hold 73 percent of the currently available low band spectrum. This auction may be the only opportunity to snap up what is often called “beach front property” in the mobile space.

As Wheeler gets closer to making a decision on the final auction rules, he has decided to recommend that the FCC keep the reserve at 30 MHz. That’s opened him up to all kinds of lobbying in advance of  the commission’s vote on the final rules scheduled for its monthly meeting July 16.

“Due to the importance of low-frequency spectrum to competition in the wireless market, the Department is concerned that acquisitions of this spectrum, whether at auction or through other transactions, by carriers that already control large percentages of the available low-frequency spectrum, could be used to create or enhance market power,” Baer wrote.

“The Department supports the Commission’s effort to reserve a significant amount of spectrum for sale in each geographic area for wireless carriers that do not already own a large proportion of the low-frequency spectrum in that area,” Baer said.

T-Mobile has taken the lead in a campaign to convince Wheeler and the commission that it should increase the reserve spectrum set aside for smaller carriers from 30 MHz to 40 MHz. In recent days, Wheeler has also heard from Democratic lawmakers, also advocating an expanded reserve.