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So for all the talk about “fairness” and giving the “little guys” a fair shake in the upcoming incentive auction, T-Mobile’s ulterior motives were confirmed in a manner not unlike the villain’s grand unmasking in the Scooby Doo cartoons.
As if to say, “My scheme would’ve worked if not for those meddling kids…” T-Mobile filed yet another proposal yesterday at the FCC. In case you’re keeping score that makes three (at least) different proposals by T-Mobile that ask the American taxpayer to subsidize its spectrum buys. Ruh roh.
Recall that to avoid having to compete against all of the bidders – including Verizon and AT&T – in the incentive auction, T-Mobile asked the FCC to set aside a certain number of spectrum licenses in every market. Verizon and AT&T would be barred from bidding on those licenses in most markets. The FCC agreed and set aside as much as 30 MHz of spectrum for T-Mobile and others.
Perhaps feeling flush after getting the 30 MHz set aside, T-Mobile challenged the FCC claiming that the set aside wasn’t large enough. T-Mobile asked the FCC to expand that pool of protected spectrum. The Chairman has said that he will reject this plea.
Yesterday, T-Mobile came back with yet another ask. It wants the FCC to change the auction rules so the set-aside will kick in earlier in the auction. Why? To limit competing bids in order to keep the price it would pay for spectrum as low as possible.
Under the FCC proposal, the set aside does not kick in until bidding reaches several defined thresholds. First, the price for the spectrum hits $1.25 per MHz pop. (By the way, that is roughly half the price per MHZ pop of the spectrum sold at the recent AWS-3 auction that collected more than $45 billion in revenue). Second, the rules also require that the auction raise enough to buy out the broadcasters and pay for their relocation expenses before the set aside kicks in.
T-Mobile has already complained about the 30 MHz as being too small – to no avail. It also complained about the $1.25 per MHz pop – again to no avail. Now it wants to eliminate the requirement that the auction produce enough revenues overall to pay off the broadcasters. So what does this mean? It all adds up to a concerted effort to fleece taxpayers, and to subsidize a massive German conglomerate partially owned by the German government, which has made clear on several occasions that it would prefer to not invest in the United States, let alone operate a business here.
Facts can be meddling things. Giving T-Mobile a sweet deal was not the purpose of the incentive auction. The purpose of this incentive auction is to create incentive for broadcasters to sell their spectrum, make the spectrum available to wireless carriers that are willing to put that spectrum to the best use possible for consumers, and to give the American taxpayer the best return on the auction.
