T-Mobile Expected to Dominate 2.5 GHz Auction; AT&T Cites Spectrum Screen

T-Mobile is likely to be the dominant bidder in a 2.5 GHz auction expected next year, as it fills out substantial holdings in the band. T-Mobile got the spectrum when it bought Sprint and said in August it’s adding the band to its network at 600-700 sites weekly (see 2008070026). T-Mobile asked last week to move forward on an auction next year. AT&T questioned whether T-Mobile’s holdings exceed the spectrum screen.

Verizon is short on mid-band spectrum and AT&T is looking to add to its portfolio, but they have debt to manage and Verizon agreed to buy Tracfone (see 2009140052), experts said in interviews. T-Mobile will be looking to fill in gaps.

“T-Mobile will certainly use this auction to fill out its holdings in the 2.5 GHz band,” said BitPath Chief Operating Officer Sasha Javid. Other carriers are unlikely to bid aggressively “given the limited availability and unusual license configurations,” he said: “If they bid at all, it will be because they did not get what they needed in the C-band or because they want to ensure a little competition for T-Mobile.”

“T-Mobile has already been actively deploying 2.5 GHz spectrum, recently announcing that it is using that spectrum to serve millions of people in nearly 90 cities and towns,” T-Mobile said in docket 18-120. Petitions for reconsideration in the 2.5 GHz proceeding “need not further delay Commission action,” the carrier said.

A petition by the Schools, Health & Libraries Broadband Coalition “repeats previously rejected arguments and should be denied,” T-Mobile said. A petition filed by the National Congress of American Indians on the tribal application window is “moot” because the window has closed, the carrier said. Neither group commented.

“The conventional wisdom is that T-Mobile will use the auction to mop up the available 2.5 GHz licenses in rural and small town areas where the spectrum is not licensed, and they are not already leasing it from educational institutions,” said Michael Calabrese, director of the Wireless Future Program at New America. “No other mobile carrier has a financial motivation to outbid T-Mobile in any desirable market, since T-Mobile already has the largest metro markets locked up through leases they acquired with Sprint.”

“T-Mobile has an interest, but the others are looking elsewhere to meet their spectrum needs,” said New Street’s Blair Levin.

Many Wireless ISP Association members are likely to pursue 2.5 GHz licenses, a spokesperson said. If the citizens broadband radio service auction is “any indicator, there’s good possibility than many of our members, the majority of whom serve rural markets, will succeed,” the spokesperson said.

“Mid-band spectrum is critically important to deploying next-generation technologies and especially critical in rural areas where spectrum coverage over vast areas is a premium,” said Competitive Carriers Association President Steve Berry. “Competitive carriers, especially those deploying in challenging terrain, want and need access to this valuable resource,” he said: “The global pandemic has heightened the incredible need to ensure that every American, particularly those in rural areas, has access to robust mobile broadband services, and a timely auction will certainly help.”

Questions are expected on T-Mobile spectrum holdings and the FCC’s screen (see 2009030061). “T-Mobile has historically been one of the loudest proponents of aggressive application of the spectrum screen to prevent spectrum acquisitions,” blogged AT&T Executive Vice President-Regulatory & State External Affairs Joan Marsh. After the Sprint purchase, “T-Mobile itself now exceeds the Commission’s screen by an unprecedented margin throughout much of the country,” she said: “T-Mobile continues to add additional spectrum to its horde. Additional spectrum leases with Dish will cause T-Mobile to exceed the 250 MHz screen by as much as 136 MHz.” T-Mobile didn’t comment.

CEO Mike Sievert said at a virtual Goldman Sachs investor conference last week that T-Mobile is interested in the C band, with an auction starting Dec. 8. “It’s good spectrum,” he said: “We’ve been testing it. We’re interested in it. But we’re coming from a position of strength and a tradition of being disciplined.”