Eshoo to FCC: Rescind Spectrum Sales to AT&T, Verizon - Broadcasting & Cable

Eshoo to FCC: Rescind Spectrum Sales to AT&T, Verizon

Says Straight Path, FiberTower spectrum should have been auctioned
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Rep. Anna Eshoo (D-Calif.) wants the FCC to rethink its approval of deals putting high-band spectrum in the hands of AT&T and Verizon.

That came in a letter to FCC chair Ajit Pai.

The FCC's Wireless Bureau approved the transfer of millimeter-band (high-band) spectrum licenses from Straight Path to Verizon and FiberTower to AT&T in settlements with those companies for not building out the spectrum as they agreed to do when they acquired it.

Eshoo said the deals put too much valuable spectrum in the hands of companies that already had a lot, and that the FCC should have revoked the spectrum licenses of Straight Path and FiberTower and auctioned them rather than reward those companies with billions of dollars from the sales. Verizon paid more than $3 billion and AT&T about $2 billion for the spectrum, according to Eshoo, though that is using the same valuation as Straight Path (AT&T says it only paid $207 million for the spectrum).

"The bureau-level decisions awarded investors in Straight Path and FiberTower multi-billion dollar windfalls at the expense of taxpayers," she told Pai.

She complained that selling the spectrum to the largest incumbents further concentrated high-band spectrum with companies that dominated the low-band spectrum for decades.

She also suggested there was something fishy about the sale coming without having to be approved by the full commission and only weeks after the FCC lifted a "spectrum screen" that guarded against overconcentration of spectrum with any one company.

FCC commissioner Mignon Clyburn had requested a full-commission vote. Eshoo asked Pai to reconsider that request.

Eshoo conceded that the FCC was already planning to auction 28-GHz (high-band) spectrum later this year (as long as Congress resolves an issue related to upfront payments being made directly to the treasury), but said the bureau's decision on Straight Path and FiberTower would distort that auction since Verizon's added spectrum essentially gives it a controlling interest in the band.

She told Pai she wanted the FCC to rescind the bureau-level decision and allow the full commission to vote, as well as revoke the Straight Path and FiberTower licenses now in the hands of Verizon and AT&T, auction them "for the benefit of the public," and auction the other millimeter wave bands (the FCC is already planning to do that).

Eshoo did not mention the record fine the FCC recently collected from Verizon and Straight Path to settle the FCC complaint that Straight Path had not been straight with the FCC about the buildout.

“I couldn’t agree more with Congresswoman Eshoo’s concerns about the Straight Path and FiberTower transactions, and I thank her for her letter," said Stephen K. Berry, president of the Competitive Carriers Association, whose members, as the name suggests, have to compete with AT&T and Verizon. "To say that the Wireless Telecommunications Bureau’s decisions are not in the public interest is certainly an understatement, as they reward Straight Path and FiberTower with multi-billion-dollar windfalls for not building out spectrum and provide Verizon and AT&T a first-mover advantage in coveted 5G spectrum at the expense of American taxpayers.  

"Industry, the economy and consumers would all benefit from an auction of the valuable high-band spectrum, as opposed to going down the path of further spectrum consolidation by already dominant wireless incumbents.  CCA has filed an Application for Review and Petition for a Stay in both transactions, and I strongly encourage the FCC to reverse the Bureau’s decisions on Straight Path and FiberTower.  If nothing else except for the sake of transparency, the full Commission should act on the issue.”

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