Following in Verizon Wireless’s footsteps, AT&T and Frontline (and a handful of smaller companies) are appealing the FCC’s auction rules for the upcoming 700Mhz frequency spectrum auction in January. The petition is an appeal to the FCC to remove some stipulations to the auction that is seen as “an extreme penalty,” according to AT&T’s petition.
Among the rules that are causing some discontent is the requirement that any company wishing to bid on any part of the 700Mhz spectrum will have to reach an agreement with US public safety departments to give them access to the frequency for nationwide use.
The petition also mentions that the ban of wholesale frequency reselling will hurt smaller companies whose only option to use the frequency would be to lease it from larger carriers with the bankroll to actually buy a piece of the spectrum. Large carriers would be affected as well. Wholesale frequency licensing is a good source of revenue to help recoup yearly operational costs in the billions of dollars.
Then there’s the prohibitively high reserve-price on the spectrum, especially the 22Mhz block of open-access spectrum that was laid aside by FCC Chairman Martin last month. These reserve-prices basically ensure that smaller companies will be out-gunned from the get-go. Without the deep cash reserves of big-hitters Google and Apple, wireless startups will have no option but to man the sidelines and hope that the reserve price for the 22Mhz block of open-access spectrum isn’t met (which would require that particular block to be re-auctioned, sans open-access requirements).
We’ll see how this one plays out. Our thinking is that the FCC isn’t going to budge on their decision. Afterall, they took a good long time to get these rules enacted in the first place.
[Via: Electronista]