AT&T and the Federal Communications Commission are in a high-stakes standoff.
The cell-phone carrier is furious over the FCC’s planned rules for an upcoming auction of airwave licenses and is threatening to sit out of the auction entirely.
An AT&T boycott could be devastating for the FCC. The federal government is depending on the auction to generate billions of dollars in revenue to build a nationwide high-speed communications network for first responders and to pay off a 2012 tax cut.
But speaking to reporters on Wednesday, FCC Chairman Tom Wheeler accused AT&T of bluffing. Wheeler said it’s “hard to conceive” of the nation’s second largest wireless carrier not participating in the auction.
The FCC chief noted that AT&T and other carriers have been aggressively lobbying for years to get the FCC to give them access to more spectrum — the frequencies that carry all wireless signals.
“Wireless carriers, including AT&T, have been very forceful and persuasive in making the case that the success of their ability to serve consumers — and therefore the success of their business — depends on additional spectrum,” Wheeler said. “I have a hard time envisioning this once in a lifetime opportunity for this kind of beachfront spectrum being something that people throw up their hands and walk away from.”
Under a plan approved by Congress in 2012, the FCC will pay TV stations around the country to give up their broadcast licenses. The agency will then auction those licenses to wireless carriers to give them access to more airwaves to carry their customers’ traffic.
Wireless networks have become clogged in recent years as consumers increasingly stream videos and browse the Web on their smartphones.
But Wheeler plans to cap the amount of spectrum that AT&T and Verizon — the industry’s two largest companies — can buy in the auction.
The FCC chief has warned that without caps, AT&T and Verizon could buy up all of the low-frequency spectrum, which is especially valuable because it can carry signals over longer distances.
If Sprint and T-Mobile — the smaller of the four national carriers — are boxed out of the auction, it could starve them of the spectrum they need to compete, Wheeler has claimed. Consumers would start fleeing the two smaller carriers if their networks become congested with traffic.
The death of Sprint and T-Mobile would allow Verizon and AT&T to ramp up prices.
In a filing to the FCC earlier this month, AT&T claimed the proposed limits would put the company in an “untenable and unacceptable position.”
The company argued that it’s only worth bidding in the auction if it can gain access to large enough blocks of spectrum to support cell-phone service.
“AT&T has never declined to participate in a major spectrum auction and certainly did not intend to do so here,” Joan Marsh, an AT&T vice president, wrote.
“But if the restrictions as proposed are adopted, AT&T will need to seriously consider whether its capital and resources are directed toward other spectrum opportunities that will better enable AT&T to continue to support high quality LTE network deployments to serve its customers.”
On an earnings call on Tuesday, John Stephens, AT&T’s chief financial officer, appeared to slightly walk back the company’s threat. He said the company is still working with the FCC to “establish auction rules that will certainly promote a good result for AT&T but will also promote a successful result for the auction.”
“So we are interested in participating,” Stephens said.
The FCC is expected to vote on the restrictions on May 14. The auction is scheduled for next year.
What We're Following See More »
Donald Trump, when pressed by Lester Holt on why he finally admitted that President Obama was born in America, repeated his widely debunked claim that it was started by Hillary Clinton.
Hillary Clinton went point by point on how race can so often determine the treatment that people receive, mentioning recent shootings in Tulsa and Charlotte, calling for restored trust between communities and police, and demanding criminal justice reform. Trump responded by calling for law and order and touting his endorsements from police unions. He then said that “African Americans are living in hell,” saying they are just walking down the street and getting “shot ... being decimated by crime."
Just as Hillary Clinton was inviting debate viewers to visit her site for real-time fact checking, there appeared to be a problem with Donald Trump's own campaign website. For about a 15-minute period, a blank page or an error message appeared when we tried to load the Trump site.
Donald Trump has come out in the first segment of this debate raring to go. Trump has interrupted nearly every answer being given by Hillary Clinton, talking over her time and again. Clinton is sticking to her guns, smiling while Trump speaks and then calling on people to go to her website and see the fact checking being done.
Each candidate opened the debate sticking to their campaign's script. Hillary Clinton opened with a call for how to affect the future while Donald Trump spoke about many of the plights being faced by American workers today. Clinton discussed innovation, helping small business, and equal pay for women. Trump, in turn, discussed how jobs are leaving America, calling our country the "piggy bank" for other nations.