DOJ Reiterates Support for Low-Band Auction Rules

Says rules allowing smaller carriers to get more low-band spectrum are pro-competitive
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The FCC appears to be lining up its ducks on spectrum auction aggregation limits even as it ducks criticism from AT&T, Verizon and others that they could adversely impact the broadcast incentive auction.

According to a letter from William Baer, who heads up the Department of Justice's antitrust division, Wheeler chief of staff Ruth Milkman requested that DOJ reiterate its April comments in support of auction rules that allow smaller nationwide carriers without as much low-band spectrum as, say, an AT&T or Verizon, to get access to that spectrum via the upcoming auction.

Baer did so, saying that he was writing to "confirm that the Department stands by the views articulated in those April 2013 comments, and that no intervening developments in the industry have affected the compelling economic rationale for well-defined, competition-focused rules concerning acquisitions by the most spectrum-rich providers."

Baer said low-band frequency was a "competitively critical input" and the antitcompetitive risks of foreclosure by larger carriers were not simply theoretical.

"If the largest providers are able to use a foreclosure strategy, they will be able to exercise a degree of market power, at least in certain areas, due to their networks’ superior coverage characteristics," he said.

FCC Chairman Tom Wheeler is proposing that spectrum be reserved in the auction for those who don't already have 1/3 of the low band spectrum in any one market. AT&T, for one, has said that and adjustments to the spectrum screen, could keep it from bidding in the majority of markets.

The commission also plans to add low-band spectrum as an input in its local market aggregation screen, which triggers a deeper dive on the public interest value of spectrum transfers that reach a particular threshold of concentration.

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