FCC Clears Path For mmWave 5G Auction

The FCC today took measures that will lead to an auction for 5G spectrum in 2019. The agency adopted new rules to make a total of 3,400 MHz of mmWave spectrum available in the 37 GHz, 39 GHz, and 47 GHz bands. 

All three bands will be broken into 100 MHz blocks and licensed by partial economic areas. The auction will be an incentive auction for contiguous blocks of spectrum. Incentives will be given to those entities that choose to relinquish their spectrum holdings and make new licenses available. 

There will be two phases to the auction, a “clock phase” wherein bidders can bid on generic license blocks and an “assignment phase” in which clock phase winners can bid on specific frequencies.The FCC didn’t go as far as setting a date for the auction, but it often targets the November timeframe. 


Source: FCC

T-Mobile Receives Government Approval To Test Shared Airwaves

T-Mobile has received a go-ahead from US Communications Regulators to “test the impact of commercial wireless broadband” on a set of highly sought after group of airwaves in use by government agencies. Any testing by T-Mobile would allow for both the company and the government to decide potential opportunities and challenges posed to wireless carriers seeking to deploy next generation 4G services on the 1755-1850MHz bands while sharing the bands with existing government users.

“The testing we propose is part of an industry-wide effort to build critical understanding of operations in this band, and we will be working with other carriers and equipment manufacturers moving ahead,” said Tom Sugrue, T-Mobile’s senior vice president of government affairs.

It was back in March that the Commerce Department’s National Telecommunications and Information Administration proposed partially splitting the bands between federal use and commercial use. Currently, more than 20 federal agencies hold more than 3,100 individual frequency licenses within the spectrum bands. ‘

“By granting the first authorization of testing in the 1755-1780 MHz band, the commission hopes to facilitate commercial mobile broadband services in that band, which would significantly benefit millions of U.S. wireless consumers and help drive the mobile innovation economy,” FCC Chairman Julius Genachowski said in a statement.

The Obama administration hopes to free up more airwaves to meet the rising demand for wireless space. Wireless carriers have been opposed to using any spectrum that is in joint operation with government operations, warning that the value of the spectrum is lowered.

We’ll be interested to see how T-Mobile’s testing of these airwaves plays out, as we’re all for the company gaining more spectrum to increase coverage.

Leap Wireless And T-Mobile Strike Deal To Swap Spectrum

Earlier today, Cricket's parent company Leap Wireless announced a deal that'd see its own Savary Island Wireless, T-Mobile and Cook Intlet/VS GSM VII GPS (a T-Mobile venture) swap spectrum in a handful of markets. The agreement lets Leap Wireless inherit 10MHz of AWS waves in Phoenix, Houston, Galveston, and Brian-College Station, TX, while the Magenta carrier in partnership with Cook Intlet -- would receive spectrum in various markets within Alabama, Illinois, Missouri, Minnesota and Wisconsin. Leap's CEO Doug Hutcheson says the move's bound to help "provide us a longer term flexibility to offer a larger LTE channel." Of course, the pact still needs the OK from the FCC.

AT&T Pursuing Leap Wireless Purchase For Its Spectrum

AT&T has made no bones about its need for more wireless spectrum, and now that it can't acquire T-Mobile, it's considering a myriad of options to fill in the gaps. The Wall Street Journal is reporting that the company is in the midst of talks with Leap Wireless, which owns the more well-known brand Cricket, saying that the two sides "have been engaged in talks about a potential deal." The talks are apparently the result of a rapport the two companies built up when AT&T was considering selling Leap some spectrum to make the T-Mobile acquisition more palatable. Though any potential deal is reportedly months away, it could remove one of the more successful smaller carriers from the marketplace.

It's no surprise that AT&T is looking at all options, including possible deals with MetroPCS and even Dish Network, which recently tussled with AT&T in FCC filings over its own wireless plans. Dish might not be interested in selling, the WSJ reports, and MetroPCS is also apparently not looking like a likely partner.

While AT&T's spectrum crunch is a problem, it has to be said that the company is still managing to roll out LTE fairly well in the short term. Compared to T-Mobile (which hasyet to detail any clear LTE plans) and Sprint (which has to now manage without LightSquared's network), the situation could certainly be worse.

AT&T to Offer Bigger Asset Sales to Save Takeover

AT&T Inc., with its T-Mobile USA takeover facing regulatory opposition, is preparing the biggest remedy proposal yet to the Justice Department to salvage the $39 billion deal, according to a person familiar with the plan.

The company is considering an offer to divest a significantly larger portion of assets than it had initially expected, said the person, who declined to be identified because the plan isn’t public. Though the exact size of the disposals hasn’t been determined, they could be as much as 40 percent of T-Mobile USA’s assets, the person said.

The asset sale is an attempt to address the concerns of the Justice Department, which sued to block the takeover on Aug. 31, saying the deal would “substantially lessen competition” in the wireless market. The acquisition was dealt another blow on Nov. 22, with the Federal Communications Commission signaling an attempt to block it.

“It’s going to be problematic for AT&T to find a successful divestiture solution,” said Kevin Smithen, an analyst with Macquarie Securities USA Inc. in New York. The pool of potential buyers isn’t very big and those that might be interested probably wouldn’t have a chance, Smithen said. “It’s unlikely that the DOJ would allow a big competitor like Verizon to purchase the assets,” Smithen said.

Customers Versus Spectrum

ATT’s proposal is likely to include the divestiture of a higher share of customers and lower percentage of spectrum, said the person familiar with the matter. The company needs more capacity to serve users as it adds customers and more of them adopt data-intensive smartphones.

AT&T, based in Dallas, fell 0.5 percent to $27.41 yesterday in New York and has lost 6.7 percent this year. T-Mobile owner Deutsche Telekom AG added 1.6 percent to 8.83 euros in Frankfurt and has declined 8.6 percent this year.

Brad Burns, an AT&T spokesman, and Andreas Fuchs, a Deutsche Telekom spokesman, declined to comment.

The asset-sale proposal, which could come as early as the next Justice Department hearing on Nov. 30, might be the only remaining option if the second-largest U.S. wireless operator wants to avoid a lengthy court battle in its bid to become the country’s top mobile carrier. The purchase may vault it past Verizon Wireless, depending on the size of the divestitures.

On Nov. 24, AT&T and Deutsche Telekom asked to pull their deal applications to the FCC so the companies could better focus on the Justice Department lawsuit. AT&T also said it would take a one-time charge of $4 billion to cover the breakup fee it will need to pay to Deutsche Telekom if the deal fails.

‘All or Nothing’

One approach is to propose a remedy that would lessen the market impact of losing the fourth-largest wireless service provider. AT&T has been in discussions with MetroPCS Communications Inc. and Leap Wireless International Inc. to sell spectrum and customers as a way of propping up competition in the absence of T-Mobile.

The second approach is to fight the court case, which is scheduled to begin Feb. 13.

“If there were a last, best offer to be made, they would have made it a long time ago,” said Craig Moffett, a Sanford C. Bernstein & Co. analyst in New York, who has a “market perform” rating on AT&T shares. “It’s very hard to envision a solution that would satisfy the problems the DOJ found with the deal. Realistically, AT&T is going to take its chances in court in February. It’s all or nothing.”

According to a term in the agreement, AT&T would be able to pay less than the deal’s original $39 billion value if regulators demand asset sales that surpass 20 percent of that figure, or about $7.8 billion, three people with direct knowledge of the situation said Sept. 7.

AT&T could walk away from the deal and pay Deutsche Telekom a breakup fee if the concessions requested top 40 percent of that value, the people said. If the deal doesn’t happen there’s no way AT&T can avoid paying the breakup fee, the people said.