T-Mobile: FCC is wasting jobs and money on 2.5GHz license delay

Americans stand to lose up to $42 billion and 17,000 job opportunities while the FCC sits on spectrum licenses that T-Mobile won in an auction last year, according to a new report prepared for T-Mobile.

The report, written by The Brattle Group for T-Mobile, concludes that T-Mobile's 2.5GHz spectrum "would generate approximately $42 billion in consumer welfare." The firm said the figure is "a measure of the value Americans lose by being denied access to this midband spectrum and the mobile service and 5G Home Broadband it enables."

The report also warns that T-Mobile's delayed capex investment in the Auction 108 licenses could result in significant job losses. "The creation of over 6,500 wireless industry jobs will be put on hold until the licenses are issued. The creation of approximately 17,000 jobs in the overall economy will be put on hold until the licenses are issued," the report explained.

The FCC's Auction 108 ended last year. T-Mobile spent $304 million in the auction, winning 90% of all the licenses sold, or 7,156 of the 7,872 total licenses that received winning bids.

However, the FCC lost its Congressional auction authority to administer spectrum licenses amid a Washington, DC, battle over the future of the 3.1GHz-3.45GHz spectrum band. As a result, T-Mobile's Auction 108 winnings have been stuck in limbo for months amid Congressional crossfire.

T-Mobile argues that the FCC in fact does have the authority to issue its licenses, including under a temporary status. But FCC Chairwoman Jessica Rosenworcel has pushed back against that argument, asserting instead that the agency must first regain Congressional auction authority before approving the transfer of the licenses. (After this article was published, an FCC representative sent Light Reading the text of the legislation that prevents the FCC from issuing spectrum licenses.)

Political maneuvering

The Brattle Group is no stranger to the political battlefield. The firm often provides the economic arguments that support the political agenda of the CTIA, the US wireless industry's main trade association. For example, the firm issued a report earlier this year that found that 5G networks in the US may begin to run out of capacity within the next five years. That directly supports CTIA's efforts to encourage lawmakers to allocate more licensed spectrum to association members like Verizon and T-Mobile.

"Through Auction 108, the FCC offered approximately 8,000 flexible use county-based licenses for white spaces in the 2.5GHz band. But nearly 10 months after the auction closed, the FCC has failed to distribute the vast majority of the auctioned licenses, depriving Americans of new or upgraded 5G service. This report estimates the cost of that delay to the economy, jobs, and vulnerable groups," The Brattle Group wrote in its report for T-Mobile.

"2.5GHz spectrum has been instrumental to T-Mobile's 5G connectivity and today's next-gen service. We invested in more of this midband layer in order to continue to bring coverage and capacity to many Americans, especially in the rural areas. This journey to expand our network creates jobs and leads to innovations that can help solve businesses' and customers' pain points," Ulf Ewaldsson, T-Mobile's new networking chief, noted in a LinkedIn post about the new Brattle Group report.

The report is the latest effort by T-Mobile to garner support for its campaign. For example, earlier this year it retained several former top FCC officials to argue its case. (After this article was published, T-Mobile sent Light Reading a list of all of its public, high-profile supporters, which number around a dozen.)

The opponents and the supporters

T-Mobile does have some high-profile supporters, according to the analysts at New Street Research. The firm noted that during Congressional hearings last week, FCC Commissioner Brendan Carr said he believes the FCC still has the power to issue the licenses.

T-Mobile isn't the only company with a position on the topic. Just after the close of Auction 108, AT&T argued that T-Mobile's midband spectrum holdings "threaten long-term competition for mobile broadband services." As a result, the operator urged the FCC to block T-Mobile from receiving some of the 2.5GHz spectrum it won during the 2022 auction.

Another opponent is Bloosurf. In a recent FCC filing, Bloosurf said it uses 2.5GHz spectrum to provide fixed wireless access (FWA) services in parts of Maryland and Delaware. However, "over the past several years, Bloosurf's network has experienced persistent and significant harmful interference from T-Mobile's operations in the 2.5GHz band," according to the company. As a result, it's urging the FCC to withhold T-Mobile's Auction 108 winnings.

T-Mobile does have one supporter: Dish Network. "While we share T-Mobile's optimism that the commission's authority will be restored in the future, we also recognize its concerns that the 2.5GHz spectrum will remain idle until this reauthorization occurs. Those concerns are exacerbated by the investment-backed expectations T-Mobile had when it bid in Auction 108, as well as the network plans described in the STA [Special Temporary Authority] Request, both of which have been hampered by the delay caused by the lapse. Given these circumstances, Dish agrees with T-Mobile that the commission should take action pursuant to its authority in Section 309(f) of the Communications Act and Section 1.931 of the commission's rules to grant the STA request to enable T-Mobile to deploy licenses in the 2.5GHz band for the next 180 days," Dish wrote to the FCC.

Dish's support for T-Mobile's position is noteworthy considering the two companies have often clashed over regulatory issues in the past.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano