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The ever-quotable and Tweetable CEO of T-Mobile, John Legere, was in town recently to meet with several policymakers at the FCC and up on Capitol Hill regarding the upcoming incentive auction for broadcasters’ spectrum. Politico reported that Legere said, “It pisses me off that those [rhymes with “bricks” -- we're a family blog, after all] are going to do whatever they can to push us out,” referring to AT&T and Verizon and his impression that the two companies are somehow attempting to block T-Mobile from participating in the auction.
Beyond the fact that the administrators of his alma mater St. Bernard’s Central Catholic School, the Sisters of the Presentation of the Blessed Virgin Mary, would probably rap his hand with a ruler for that kind of language, Mr. Legere is simply wrong.
As we’ve said before, T-Mobile is more than welcome to participate in any auction the FCC holds. No company can prevent another from participating. The last time large swaths of low-band spectrum came to auction in 2007, for example, T-Mobile could have participated. It chose not to.
But some companies can attempt to bake rules into an auction to prevent other companies from participating fairly and squarely in the auction. And here, Mr. Legere and T-Mobile are actually doing whatever they can to push companies like Verizon out of the auction. For example, T-Mobile – and Sprint and DISH – lobbied for and received from the FCC a set aside of spectrum in the upcoming auction that only they are allowed to bid on. Verizon can’t. AT&T can’t.
This set-aside of 30 MHz of spectrum is intended for “smaller carriers.” Yet T-Mobile’s parent company is Deutsche Telecom and has a market cap of $76 billion. Sprint’s parent company is Softbank, with a similar market cap of about $70 billion. In other words, these aren’t “small” companies. This set aside also comes at a time when T-Mobile is rumored to be in early talks with DISH on a merger that would give them the combined company more than double the per-customer capacity of Verizon – if it actually deployed it on a network (something DISH has yet to do despite its massive spectrum holdings). And it comes at a time when the FCC and others in Washington are examining DISH’s actions in the most recent spectrum auction, where it’s tried to claim a taxpayer-funded $3.3 billion discount from a spectrum program intended for “small carriers.”
Yet Mr. Legere was in DC, hat in hand, asking that more discounted spectrum on the taxpayer’s dime be included in the set-aside. We think this is a bad idea. Others think this is bad public policy. Others more think such set-asides that hinder other companies from meeting their customer demand set a bad precedent. The FCC doesn’t need to give additional handouts to global companies with the financial wherewithal to compete. Nor should it be handing out discounted spectrum to companies with a track record of not investing in networks or serving consumers. The record of the U.S. wireless marketplace is clear: if one invests in networks, innovates and meets consumer needs, success can follow, with no need for government assistance.
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