T-Mobile has done a lot to shake up the American wireless industry over the last year but it still faces a sizable gap in network quality compared to Verizon and AT&T, America’s twin wireless titans that both have access to the best spectrum money can buy. And now The Center for Public Integrity has put together a lengthy report detailing how Verizon and AT&T are ramping up their lobbying operations ahead of another low-frequency spectrum auction that has the potential to give them a killer advantage over T-Mobile and Sprint for years to come.
Next year the government plans to auction off spectrum on the 600MHz band that will be potentially even more valuable to wireless carriers than the 700MHz spectrum that the FCC auctioned off back in 2008. Spectrum on lower frequencies propagates better than spectrum on higher frequencies, which means that T-Mobile and Sprint could make huge leaps forward in improving their networks if they were to win big chunks of spectrum on the 600MHz band.
However, Verizon and AT&T are working to make sure that never happens. The two carriers spent nearly $30 million on lobbying last year alone while Sprint and T-Mobile combined to spend a comparatively paltry $8 million. And a healthy portion of Verizon and AT&T’s lobbying is going toward telling the government that they should be allowed to gobble up as much spectrum as their budgets can afford.
To that end, Verizon and AT&T are also funneling money to Mobile Future, a Washington, DC-based nonprofit advocacy group whose chairman recently told senators “that the best way to ensure a successful auction — one that would best serve customers and promote innovative technologies — is to allow all wireless companies to bid without restrictions on as many frequencies as they want,” The Center for Public Integrity says.
This figures to be a major test for the FCC under chairman Tom Wheeler. If the FCC allows the two companies with the most money to once again dominate a low-frequency spectrum auction as they did with the 700MHz auction six years ago when T-Mobile and Sprint decided not to participate, it could deal a devastating blow to any other companies that want to compete in the American wireless market. If Verizon and AT&T once again take the lion’s share of spectrum on the 600MHz band then it will make a Sprint-T-Mobile merger look a lot better as an alternative to having a permanent wireless duopoly.
Post updated to clarify that the $30 million figure AT&T and Verizon spent on lobbying does not pertain solely to this issue, and to clarify that Sprint and T-Mobile did not participate in the earlier low-frequency spectrum auction mentioned in the final paragraph.