Quid pro quo: T-Mobile’s support for Title II could earn it favors from the FCC

Quid pro quo: T-Mobile’s support for Title II could earn it favors from the FCC

T-Mobile recently reversed its opposition to the FCC’s plan to regulate the internet as a public utility, and is now asking the commission to protect it against competition from larger rivals.

Roslyn Layton, a Ph.D fellow at Aalborg University in Copenhagen and a visiting fellow at the American Enterprise Institute, told this reporter that, “I don’t have any proof, but I think this is a quid pro quo between T-Mobile and the FCC whereby T-Mobile would support Title II in exchange for special treatment.”

Initially, according to Fierce Wireless, “T-Mobile CEO John Legere came out against President Barack Obama’s … push for the FCC to reclassify broadband as Title II common carrier services.”

In an interview with The Wall Street Journal last week, though, the company’s COO, Mike Sievert, claimed to have no objections to the Title II proposal, saying, “There is nothing in there that gives us deep concern about our ability to continue executing our strategy.”

“The whole reason T-Mobile is even in the United States is because the EU put excessive regulations on the telecom industry,” Layton pointed out, so it seems suspicious that T-Mobile would suddenly start to favor government regulations.

In comments filed with the FCC, T-Mobile contends that during the last spectrum auction:

Some bidders were able to successfully exploit certain loopholes in the Commission’s auction design and anti-collusion rules to the detriment of other bidders and the public interest.

T-Moible called on the FCC to adopt “measures … designed to tighten the competitive bidding rules.”

 

Specifically, T-Mobile’s complaints were directed against Verizon and AT&T, the two largest wireless carriers in the U.S., which it claims were able to take advantage of their “deep pockets” to win 63% of the spectrum sold in the last auction, whereas “T-Mobile bidding on its own was able to secure only 7% of such spectrum.”

In an effort to prevent Verizon and AT&T from hogging spectrum again at the next auction, Fierce Wireless reports that representatives for T-Mobile began lobbying the FCC in August “to increase the size of the reserved spectrum to be set aside for smaller carriers.”

Currently, three out of seven “blocks” of spectrum are set aside for small carriers, but T-Mobile wants to increase the reserve to four blocks. The company explained:

Expanding the reserve would ensure that the two dominant carriers will be forced to compete with one another in the auction, and that sufficient blocks will exist for two non-dominant carriers to acquire spectrum sufficient to compete nationally against the two dominant providers.

However, Layton argued, “T-Mobile is extremely profitable, they’re competitive, and they’re gaining customers, so they don’t need special treatment from the FCC,” adding:

There are always people willing to question the efficacy of markets. We have no proof that Verizon and AT&T did anything of a collusionary nature.

This report, by Peter Fricke, was cross-posted by arrangement with the Daily Caller News Foundation.

LU Staff

LU Staff

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