Sprint/T-Mobile Plan To Buy Spectrum Together May Be Blocked By FCC 28
An anonymous reader writes with a FCC proposal that is bad news for Sprint and T-Mobile. A proposal from FCC Chairman Tom Wheeler would block an attempt by Sprint and T-Mobile US to buy spectrum together in the incentive auction that will transfer airwaves from broadcast TV stations to cellular carriers next year. Announced on Friday, Wheeler's proposal seeks to help the smallest wireless companies develop business partnerships with larger ones. But it would not allow partnerships between the biggest carriers, since more than 95 percent of US customers are served by either AT&T, Sprint, T-Mobile, or Verizon Wireless. "Our goal is to promote the participation of as many parties as possible in the auction," FCC Wireless Telecommunications Bureau Chief Roger Sherman wrote Friday. "If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition. Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed."
Re:Common sense (Score:4, Informative)
A good common sense opinion from Mr. Wheeler and the FCC.
I am not so sure. If the two companies co-own the spectrum, they can each use it where it is most effective. This makes it worth more to them, so they may bid more, thus paying more money to the government, and means that the spectrum should be more effectively utilized, bringing benefits to the consumer. It doesn't seem obvious to me that banning combined bidding is "common sense".
Paying more money to the government is the opposite of "benefits to the consumer" -- the billions of dollars that companies pay for spectrum aren't paid out of "free money", it's paid by consumers.
But it's clear that under the current system, if Sprint and T-Mobile aren't allowed to pool their funds for bidding, they'll be out-bid by the 2 huge duopoly providers, it's unlikely that some fresh new upstart is going to be able to come up with the funds to compete in the spectrum bidding and still have money leftover to build out the network to use it.
Re:Common sense (Score:3, Informative)
The problem is that in the real world, huge companies can afford to acquire resources just to keep them from being available to competitors.
This actually happened in downtown Miami. During the early-2000s building boom, downtown Miami got several dozen new skyscrapers -- nearly ALL of which have huge pedestal garages with more parking spaces per square foot of commercial floorspace than some suburban office parks & shopping malls. Yet, if you go to downtown Miami on Saturday night, you're going to spend $20 to park in a moderately full garage surrounded by 5 or 6 empty garages that are officially closed for the weekend. Basically, a group of investors went in and bought up most of the surplus capacity for a pittance during the real estate crash with the express intent of taking most of the spaces off the market and allowing them to get away with charging a lot more for the few remaining spaces. Making matters worse, they even bulk-leased parking spaces from the goddamn CITY OF MIAMI, so even THOSE garages are "full" despite being mostly unoccupied by actual cars. The problem is the worst in Brickell (the area south of downtown Miami proper), because the City of Miami SOLD OFF the vacant lots it used to own and operate for parking on the assumption that all the new buildings had abundant private parking garage space anyway. In effect, a group of investors figured out how to hack the system, and totally pwn3d Miami residents in the process.