T-Mobile starts spending political capital to get its 2.5GHz spectrum
T-Mobile is embarking on a political campaign to get its 2.5GHz spectrum licenses out from under the FCC. And according to the financial analysts at New Street Research, the company isn't afraid to "spend some political and financial capital to demonstrate that it has a strong argument that granting the licenses is both legally allowed and in the public interest."
T-Mobile's latest maneuvers: It's asking for temporary access to the licenses and has retained several former top FCC officials to argue its case.
At issue are thousands of 2.5GHz spectrum licenses T-Mobile won at an FCC auction last year. The FCC is in charge of awarding those licenses to auction winners. However, the agency may have lost its Congressional auction authority to do so amid a Washington, DC, battle over the future of the 3.1-3.45GHz spectrum band.
T-Mobile's licenses, it seems, have been caught in the Congressional crossfire.
Pulling out the big guns
"We think the [Communications] Act clearly authorizes the commission to continue to grant licenses for which mutual exclusivity has previously been eliminated by auction," wrote Samuel Feder, Thomas Johnson, Jr., Howard Symons and Christopher Wright in a new letter to the FCC. While those names might not ring a bell outside of the DC Beltway, the New Street analysts pointed out they were the general counsels for FCC Chairmen William Kennard (1997-2001), Kevin Martin (2005-2009), Tom Wheeler (2013-2017) and Ajit Pai (2017-2021).
In their letter, the former FCC officials – all now working at various DC-area law firms – argued that the FCC does have the regulatory authority to release spectrum licenses to auction winners, even if it no longer commands Congressionally appointed auction authority. That's important considering TR Daily reported that the FCC's current Chairwoman, Jessica Rosenworcel, said that "the actual issuance of the licenses is constrained."
"The letter could be the first step in a litigation strategy to force the FCC to grant the licenses," the New Street analysts wrote.
T-Mobile of course is no stranger to political machinations. The company successfully lobbied for regulatory approval for its blockbuster $26 billion acquisition of Sprint.
To be clear, T-Mobile's new letter isn't the company's only gambit. T-Mobile also asked the FCC for Special Temporary Authority (STA) access to the licenses it won in the auction. Such a move could allow the company to deploy 5G on its 2.5GHz winnings while Congress continues to debate the FCC's auction authority.
"While T-Mobile expects that the commission's auction authority will be restored, the timing for when that will occur is unclear," the company wrote. "Due to these extraordinary circumstances, the 2.5GHz spectrum for which T-Mobile's subsidiary was the high bidder at auction seems likely to remain idle for some period – an outcome clearly contrary to the public interest."
Interestingly, T-Mobile argued that it would be able to put "much of the spectrum" into action "with little to no infrastructure deployment." The company also said that it would like to get access to the licenses for its growing fixed wireless access in-home Internet business, "for enhancing the offering to support faster speeds and for creating sufficient capacity necessary to initiate service in new areas."
"While T-Mobile would, of course, prefer the FCC simply grant the licenses, the STA request, in conjunction with the general counsel letter, may provide a politically acceptable way to enable T-Mobile to utilize the fallow spectrum as soon as possible, while waiting for the Congress to reauthorize the FCC's auction authority," wrote the New Street analysts.
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano