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Sorry, T-Mobile. Wheeler is sticking with spectrum reserve plan

FCC Chairman Tom Wheeler FCC Chairman Tom Wheeler at NAB 2014

Federal Communications Commission chairman Tom Wheeler confirmed Thursday that he won’t set aside a larger spectrum reserve in the upcoming broadcast incentive auction for bidders other than AT&T and Verizon.

The news is a blow to T-Mobile, Sprint, and other smaller carriers that have carried on an aggressive campaign to persuade Wheeler to increase the reserve from its current 30 MHz to 40 MHz.

Planned for early 2016, the broadcast incentive auction of coveted, low-band spectrum could be the last opportunity competitors to the big two wireless carriers have to level the playing field. The commission will vote July 16 on the reserve, as well as a proposal Wheeler circulated Thursday to modify auction bidding rules to help small and rural wireless carriers.

Recognizing that more than 70 percent of low-band spectrum is in the hands of the big two wireless carriers is the reason why the FCC set aside 30 MHz a year ago, Wheeler wrote in a blog post.

“While some parties have petitioned the commission to increase the size of the reserve, the draft order on reconsideration I am circulating today [Thursday] would maintain the reserve size at the current level,” Wheeler wrote. “The current reserve size of 30 megahertz balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.”

T-Mobile warned the FCC to heed the call from lawmakers and the Department of Justice to increase the reserve. “Low-band spectrum is the holy grail for AT&T and Verizon. If others get it, and the Big Two have to compete on price, their customers alone would save over $20 billion per year. That’s why everyone with a wireless phone has a stake in the outcome of this proceeding, and the FCC should heed the calls of DoJ, many in Congress and a slew of consumer groups and move to strengthen the reserve,” said Andy Levin, T-Mobile’s senior vice president of government affairs.