By Nick Wood, Total Telecom
Monday 04 August 2014
Sprint and T-Mobile US could be blocked from jointly bidding for frequencies as part of a broader effort by the Federal Communications Commission to encourage smaller companies to enter the U.S. mobile market.
A Wall Street Journal report in July claimed that the operators were in talks to form a $10 billion joint venture for the purposes of participating in next year’s TV spectrum auction in the event their anticipated merger is not completed in time.
However, in a notice of proposed rulemaking (NPRM) issued on Friday, the FCC said it would seek to prevent such partnerships.
“Our goal is to promote the participation of as many parties as possible in the auction. 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,” explained Roger Sherman, chief of the FCC’s wireless telecommunications bureau, in a blog post.
“Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed,” he said.
Instead the FCC hopes to encourage smaller players to enter the sector by forming partnerships with larger companies in order “to gain access to capital and cash flow, not to mention operational experience”, said Sherman.
“Allowing structured entry into the wireless business makes sense, especially given the billions of dollars it would take to build a new national network from scratch,” he said.
The FCC said that once smaller companies have gained vital experience in operations and investment they stand a better chance of becoming more robust, facilities-based competitors in the marketplace.
“We hope all stakeholders will offer constructive suggestions so we can work together to empower small businesses and entrepreneurs to participate in the spectrum economy,” Sherman said