Mobile Future

No Mo’ for T-Mo

Things for T-Mobile’s CEO don’t seem to be quite as “in the pink” these days.  After Periscoping his way through Washington, John Legere has left a path of alienation in his wake.  Rather than declaring victory for convincing the FCC to block national rivals AT&T and Verizon from bidding on up to 30 MHz of prime spectrum in the upcoming broadcast spectrum auctions, Legere is seeking to publicly bully the commission into giving his company right of first refusal over even more bandwidth and at an even steeper discount.

These latest demands made in FCC filings over the past two weeks have sparked a stadium-scale wave of eye-rolling among policymakers who finalized auction rules last year.  Not only is T-Mobile continuing to push for a larger set-aside, but now the company is trying a different tact to force the auction trigger to kick in sooner, again to benefit T-Mobile at taxpayer expense. T-Mobile’s last-ditch pleas read like a recycled mash-up of the company’s failed arguments to date, claiming: a spectrum disadvantage that does not exist; a commitment to rural America that has yet to manifest; and a fictional imperative for further government intervention flatly debunked by the real-world outcomes of the past 11 U.S. spectrum auctions.

On behalf of mobile consumers and innovators alike, the FCC would be right to say ‘enough’ and reject T-Mobile’s ever-escalating demands, as it appears poised to do at its public meeting next week.

Already, the FCC’s decision to allow the so-called ‘uncarrier’ to count itself among ‘small’ carriers in the bidding tees up a potential spectrum feeding frenzy for the company. Combined with its Deutsche Telekom parent, T-Mobile has a combined market cap north of $110 billion—not exactly small change.  And let’s not forget – even with the set-aside, T-Mobile has every opportunity to bid on any block of spectrum that is auctioned.

But without its national rivals in the mix, T-Mobile will be free to acquire prime spectrum at will and at a steep discount to its true market value.  This is especially true given that the other alpha in the restricted bidding pool—Sprint—continues to play coy about whether it will participate in the auction at all.

After a close look at the spectrum holdings of the big four national carriers, this reluctance comes as no surprise.  Contrary to Legere’s woe-are-we theatrics, a recent Goldman Sachs review of national carriers’ spectrum holdings reveals that when it comes to bandwidth suited for 4G LTE deployment, T-Mobile and Sprint have an edge over AT&T and Verizon.  Indeed, Sprint CEO Marcelo Claure is brashly declaring that his company will have the number one or two U.S. wireless network within 24 months.

The FCC does neither mobile consumers—nor even T-Mobile—any long-term favors by bowing to this latest round of demands.  After all, the prospect of healthy auction revenues is the ‘incentive’ required to lure broadcasters to put adequate spectrum on the block in the first place.  For wireless consumers and U.S. mobile competitiveness, it is imperative that these incentives are compelling, so we see as much wireless capacity as possible made available to meet fast-rising consumer demand.

Chairman Wheeler explains that his plan “balances the desire to make low-band spectrum available to parties with limited holdings while facilitating competitive bidding for all auction participants.”  This more than meets the standard laid out in T-Mobile’s latest filing, which requests a “reasonable chance to acquire low-band spectrum without fear of foreclosure.”

Mr. Legere warns that “the fate of the wireless industry, innovation and competition is reliant on what the @FCC does this summer.”  He may be right, but not for the reason he believes.  Having already won a huge advantage at the upcoming auctions, it’s time Mr. Legere focuses his business strategy not on further government favoritism and subsidies from taxpayers, but on what he so fervently claims he wants most—healthy competition in the marketplace.