The war over wireless spectrum privileges has a new battle in Congress: AT&T, Verizon, Sprint, T-Mobile, and other US carriers are now dueling over a new bill that would strip the FCC of certain critical regulatory powers in spectrum auctions. Embedded in a lengthy, meandering bill called the "Middle Class Tax Relief and Job Creation Act of 2011," a controversial clause would require the FCC to ignore competitive factors like market dominance when determining bidding eligibility for wireless spectrum auctions. Additionally, the bill would prevent the FCC from using its authority to implement net neutrality measures or mandatory wholesale requirements on licensees in auctions. In other words, the changes would award the most powerful carriers with uninhibited access to new wireless spectrum, provided they have the cash to secure it.
In a joint letter to Congress, Sprint, T-Mobile, Cricket, and others say that "stripping the FCC of its auction design direction would disserve the public interest by permitting unchecked participation by the two largest, best-funded wireless carriers in future spectrum auctions," and that "it would facilitate spectrum warehousing, inefficient use of scarce spectrum resources, and reduce spectrum auction revenues to the US Treasury." But AT&T and Verizon, which already hold a supermajority of wireless spectrum and dominating resources, have welcomed the bill's provisions — AT&T says that the FCC should get out of the way of the market in spectrum auctions, and allow those with resources and interest in building network capacity to quickly acquire spectrum. AT&T also accuses Sprint of resting on the FCC's roaming rules in order to save itself from having to invest in network capacity: it cites Sprint's forth-quarter earnings call, in which Sprint CEO Dan Hesse claims that the company's saved $15 billion between 2008 and 2011 by only making about one-third as much in capital expenditures as Verizon and AT&T. Sprint already countered AT&T's accusations when they were originally posed back in January, claiming that it actually doubled its 2011 capital investment over those made in 2010. (Perhaps AT&T hasn't heard that Sprint is actively deploying its own expansive LTE network, set to cover 250 million Americans by 2013.)
Given the peculiar placement of FCC regulatory provisions in a so-called jobs bill, it seems that AT&T, recently rebuked by the FCC and others in its failed T-Mobile takeover, is now heading straight to Congress to change the rules of the game. Once again, the same players stand on either side: Sprint, T-Mobile, and other small carriers on the side of protective FCC regulation, and Verizon and AT&T's two-headed Goliath on the other. Where it goes from here now depends on the FCCs Congressional masters, and of course, the highly-paid lobbyists that tend to them.