American wireless carrier AT&T said Dish Network and its associates have escalated the AWS-3 spectrum auction price by nearly 4,000 times.
Earlier, T-Mobile CEO John Legere said the AWS-3 auction was a success for the US Treasury, while it was a major disaster for American wireless consumers. During the auction, AT&T and Verizon bagged licenses worth $42 billion buying 94 percent of the spectrum sold at the auction in January.
AT&T has also urged the Federal Communications Commission (FCC) to revise spectrum auction rules – in the wake of Dish Network winning more licenses than any other bidder during the AWS-3 spectrum auction.
AT&T alleged that Dish Network, the third-largest pay-TV provider in the U.S., and its two partners escalated the spectrum price. The Dish entities acting in concert triple and double bid licenses in the auction nearly 4,000 times.
Joan Marsh, AT&T Vice President of Federal Regulatory, in a blog post said: “We also know that Dish and the two DEs routinely triple bid licenses (inflating demand) until Dish dropped out of the auction and then the DEs double bid them routinely thereafter.”
Dish, working through two designated entities (DEs) called SNR Wireless LicenseCo and Northstar Wireless will invest $13.3 billion for bagging the license. They got a discount of $3 billion, around 25 percent of the bid value, because they were small business entities.
AT&T was the top buyer at the auctions spending $18.2 billion to win licenses of AWS-3 spectrum. In total, 70 bidding entities were qualified to participate and 31 won licenses.
“During one round of the auction, because of their triple bidding tactics, the Dish entities collectively had close to $30 billion in bids while their actual financial exposure was only 1/3 of that,” Marsh said.
T-Mobile CEO said the auction rules need to promote competition by reserving 40 MHz or at least half of the available spectrum in the next auction for sale to the competition. AT&T and Verizon now have two-thirds of the nation’s wireless customers, and nearly $162 billion in annual wireless revenue between them.
Both AT&T and T-Mobile want FCC to take a relook at spectrum guidelines.
Baburajan K
editor@telecomlead.com
