FCC Upholds Verizon and T-Mobile Auction 107 Licenses

On Friday, July 23, 2021, the Wireless Telecommunications Bureau and Office of Economics and Analytics (“the Bureaus”) released a Memorandum Opinion and Order (DA 21-891) regarding T-Mobile and Verizon’s applications in Auction 107.  The Opinion & Order results from DISH’s Petitions to Deny the long-form applications of T-Mobile License LLC (“T-Mobile”) and Cellco Partnership d/b/a Verizon Wireless (“Verizon”) in the 3.6 GHz Service License Auction (“Auction 107”). The Commission denies DISH’s Petition and will process the Auction 107 long-form applications consistent with Commission rules.

In Auction 107, T-Mobile won 142 licenses across 72 partial economic areas (“PEA”) and Verizon won 3,511 licenses across all 406 PEAs.  On April 12, 2021, DISH filed two Petitions to Deny, alleging that following Auction 107, T-Mobile and Verizon’s license holdings would amount to spectrum aggregation that exceeds the Commission’s spectrum screen in certain geographic areas.  DISH alleged that T-Mobile would exceed the spectrum screen in 86 PEAs, and in 63 of these PEAs would exceed the screen by more than 20 MHz.  DISH also alleged that Verizon would exceed the screen in 21 PEAs, including one PEA that exceeds the screen by more than 20 MHz.  Further, DISH claimed that granting Verizon and T-Mobile’s applications in the affected areas would prevent competitors and auction participants from obtaining spectrum that is vital for mobile wireless competition.  DISH asked the Commission to deny the applications or to designate them for hearing.  T-Mobile and Verizon both filed separate Oppositions and DISH filed a Reply to each Opposition.

The Bureaus conducted a market-by-market competitive analysis to determine the likely competitive impact of spectrum aggregation and to ensure that the licenses will serve the public interest, convenience, and necessity.  In creating the competitive analysis, the Bureau defined the “product market” as combined mobile telephony/broadband services; the “geographic market” as local Cellular Market Areas (“CMA”); the “market participants” as facilities-based entities providing mobile telephony/broadband services using the spectrum bands included in the input market; and the “input market” as spectrum considered suitable and available for the provision of mobile telephony/broadband services, which amounted to 1,023 MHz of spectrum in the screen with an associated spectrum screen trigger of 350 MHz.  (Please note that because the FCC excluded locations outside of the contiguous United States from Auction 107, the total amount of spectrum in the screen is 743 MHz and the associated trigger remains 250 MHz, in the non-contiguous United States).

The Bureaus determined that the likelihood of competitive harm in the particular markets at issue is low.  Specifically, in each of the identified markets, at least four licensees have access to spectrum.  Further, DISH also has substantial spectrum holdings in each of these local markets, and many smaller entities also hold spectrum in almost all of these markets.  Therefore, the Bureaus determined that DISH made no showing that granting the licenses will cause competitive harm to DISH or other providers.

Further, the Bureaus determined that granting the licenses would be in the public interest because T-Mobile and Verizon both plan to use the spectrum to deploy 5G and other advanced wireless services.  The Bureaus found that granting the licenses will allow T-Mobile and Verizon to put the spectrum to use in the near future, which will introduce new competition and meet the increased demand for advanced wireless services in rural areas.  The Bureaus determined that DISH’s Petition failed to provide evidence that the licenses will cause harm to the public interest.

The Commission denied the Petition and found it unnecessary to designate the license applications for hearing.  The Bureaus will continue to process Verizon and T-Mobile’s Auction 107 long-form applications in accordance with Commission rules.

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