AT&T Threatens To Take Its Ball, Sit Out Spectrum Auction If FCC Doesn't Kowtow To Its Whining

Ever since terrestrial broadcasters shut down their stations and went off the air, the FCC has been mulling what to do with sections of spectrum and how that wireless space should be allocated between wireless broadcasters and other types of use. It's a complicated issue, in that much of the frequency in question is in the valuable 1GHz band. Verizon and AT&T have both expressed a great deal of interest in sucking that bandwidth down -- but given the strength and reach of the two carriers, the FCC is evaluating rules that would limit their spectrum purchases in order to encourage competition.

In response, AT&T has said that it might prefer to sit out the auction altogether rather than be limited in how much additional bandwidth it can buy. "Such restrictions would put AT&T in an untenable position, forcing AT&T to reevaluate its potential participation in the auction," Joan Marsh, AT&T's VP of Federal Regulation told FCC Chief Tom Wheeler's legal advisor, Renee Gregory, in a meeting on Monday, according to the filing.

Of course, AT&T may be engaging in saber rattling; the company likely wouldn't want to see the full share of the spectrum go to Verizon. T-Mobile and other regional US carriers have pushed the FCC to limit the amount of spectrum Verizon and AT&T can purchase because these two companies already dominate much of the sub-1GHz band. Giving them a blank check to buy as much space as either likes will further push the US towards a duopoly scenario -- and if there's one thing we generally don't need in telecommunications, it's even less choice over carriers or providers.

FCC Chief Tom Wheeler

It's worth noting that FCC Chairman Tom Wheeler's proposal is fairly modest. It calls for up to 30MHz of spectrum to be set aside for smaller carriers, once total bidding in the auction has reached a certain threshold. While 30MHz is a significant slice of data space, it's not as though the FCC is proposing to sell smaller carriers vast swaths of prime digital real estate or build out the networks they'll need to construct to take advantage of it. Nonetheless, that proposal was enough to set AT&T to threatening.  

"If the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high-quality LTE network deployments to serve its customers," said AT&T's Marsh.

How the FCC responds to this will be something of an acid test for Tom Wheeler, who faced criticism after his appointment to head the FCC. He's a long-time veteran of the lobbyist industry and worked for decades on behalf of the cable and wireless companies. Taking a firm stand against AT&T's blatant attempt to jury-rig the auction to favor its own aims would send a message on how light a touch the industry can expect from Wheeler or if he'll roll up his sleeves a bit like his beloved predecessor.