Unlike AT&T and Verizon, T-Mobile didn't throw a ton of money at the recent AWS-3 spectrum auction. CEO John Legere claims the company was able to play it "pretty conservative and strategic" thanks to its existing holdings of mid-band spectrum. But he's got a big problem with the amount of cash that T-Mobile's larger rivals (and Dish) were so easily able to pump into the auction, calling the end result good for the US Treasury but "a total disaster" for consumers. "The rules for the next auction should be focused on fostering competition in the US wireless industry and doing what’s right for the American consumer," Legere wrote in a new blog post. T-Mobile's CEO doesn't believe that's what happened at the recently concluded auction, and he wants the FCC to right the ship.
"If the government wants a competitive wireless market, they need to establish auction rules to reflect that."
Legere is making noise at this moment — after the AWS-3 auction — because he's already looking forward to next year, when the FCC will offer up spectrum that's far more valuable to wireless providers. "The results have to be different if wireless competition is going to survive," said Legere. The 2016 auction will include low-band spectrum that "gives cellular network reach" with better penetration in homes and offices. AT&T and Verizon hold over 70 percent of low-band spectrum in the US, and — despite Verizon's recent assurances that it's pretty well set on the spectrum front — Legere is worried they'll break out the checkbooks just to keep T-Mobile (and Sprint) at a disadvantage. "We too require low-band spectrum," Legere admits. "And a lot of it." Uncarrier promotions can help T-Mobile make headlines and increase its subscriber count, but network improvements will inevitably come down to spectrum.
"This whole thing should scare the hell out of you."
T-Mobile US is in no position to outbid its bigger competition; there's not enough money in the bank, and parent company Deutsche Telekom is unlikely to open its wallet very wide. So instead, the fourth-place carrier wants the FCC to reserve "40 MHz or at least half of the available spectrum in the next auction for sale to the competition." Legere has also put out a call for the FCC to stop delaying the low-band auction, and it sounds like he wants to institute a "use it or lose it" policy that would "change the rules so that this valuable spectrum is actually used to provide service to consumers rather than allowing it to be collected and traded like financial securities."
So to review, Legere — who doesn't want the FCC regulating the internet as a utility — very much does favor the commission stepping in to ensure a "fair" auction process. "The decisions the Federal Communications Commission makes will forever determine the choices available to American wireless customers in the future," he said. Legere has asked T-Mobile's customers to rally and voice their support to the FCC and lawmakers in Congress. "This playfield isn’t going to level itself." The government has shown it's unwilling to let the four major US cellular providers consolidate down to three, so Legere says it should at least preserve competition where possible, and this is one of those prime opportunities.