On February 27, 2024, the Wireless Telecommunications Bureau and Office of Economics and Analytics (collectively “the FCC”) released a Memorandum Opinion and Order (“Order”) granting T-Mobile License, LLC’s (“T-Mobile”) Auction 108 Form 601 application (“long-form application”) for licenses in the 2.5 GHz band (2495-2690 MHz), subject to certain divestiture conditions outlined below. The Order also denies AT&T Services, Inc.’s (“AT&T”) Petition to Deny. The FCC finds that grant of the licenses will serve the public interest, convenience, and necessity by facilitating access to and use of 2.5 GHz spectrum, particularly in rural areas where the 2.5 GHz band has been underutilized.
Despite the fact that grant of T-Mobile’s application will result in T-Mobile holding up to 450 MHz of spectrum (65 MHz above the screen for the contiguous United States) in certain counties across the contiguous United States, the FCC concludes that grant of T-Mobile’s long-form application is not likely to cause a competitive impact in those markets where the screen is surpassed. Additionally, despite the fact that grant of T-Mobile’s application will result in T-Mobile holding up to 350 MHz of spectrum (100 MHz above the screen) in certain markets in Puerto Rico and Hawaii, which, alongside Alaska, each have a spectrum screen trigger of 250 MHz, the FCC finds that grant of T-Mobile’s application is not likely to cause a competitive impact in those markets where the screen is exceeded, subject to certain divestiture requirements in Hawaii as noted below. Specifically, the FCC makes the following findings:
- T-Mobile won 7,156 of the 8,017 licenses offered in Auction 108 and T-Mobile will add up to 116.5 MHz of new attributable spectrum in certain counties across the United States (in some it will add no new attributable spectrum).
- T-Mobile will trigger the spectrum screen in at least one county in 75 CMAs if granted all of the spectrum it won at auction. Specifically, across those local markets where 385 MHz is the trigger, T-Mobile would hold a maximum of 450 MHz of spectrum in certain counties. In Puerto Rico and Hawaii (where the spectrum screen trigger is 250 MHz), T-Mobile would hold a maximum of 300.4 MHz and 370 MHz respectively if granted all of the spectrum it won at auction. The identified markets comprise approximately 19% of the US population.
- Outside of certain CMAs in Hawaii, as noted below, in CMAs where T-Mobile’s proposed spectrum holdings would exceed the spectrum screen, the FCC determined that grant of T-Mobile’s application was unlikely to foreclose entry, raise rivals’ costs, or otherwise harm the public interest for three reasons:
- First, in each CMA, AT&T, Verizon, US Cellular, DISH, and a number of smaller licensees all have access to spectrum and have significant network footprints (particularly AT&T and Verizon), which will encourage and enable competition despite T-Mobile’s award of additional spectrum.
- Second, the unique characteristics of the band, such as the fact that the 2.5 GHz Band is not greenfield spectrum and has an interference rule that requires adjacent licensees to closely coordinate with each other, make it unlikely that acquisition of this spectrum will grant T-Mobile a significant competitive advantage.
- Finally, the fact that Auction 108 was for overlay licenses, a majority of which were for very small amounts of unassigned spectrum or unassigned area, makes it unlikely that acquisition of this spectrum will grant T-Mobile a significant competitive advantage.
- Hawaii – The FCC will require T-Mobile to divest 20 MHz of spectrum in two markets in Hawaii. After the divestiture, T-Mobile will hold up to 350 MHz of spectrum in various markets in Hawaii. For the same reasons noted above, the FCC concludes that allowing T-Mobile to acquire up to 350 MHz of spectrum in the areas at issue is unlikely to foreclose entry, raise rivals’ costs, or otherwise harm the public interest. T-Mobile is required to divest the spectrum to entities in 10 MHz of contiguous or paired spectrum, unless WTB finds a smaller transfer would serve the public interest.
Accordingly, the FCC concludes that competitive harm resulting from the grant of T-Mobile’s long-form application is unlikely and that grant of T-Mobile’s application is in the public interest. The FCC also finds that AT&T’s Petition does not contain specific allegations to show AT&T will suffer competitive harm or raise substantial or material questions of fact under the standard of review established by section 309 of the Communications Act. The FCC notes that AT&T’s broader concerns related to spectrum aggregation are being addressed in a separate rulemaking proceeding. Thus, for similar reasons, the FCC finds good cause to deny AT&T’s Petition.
Please Contact Us if you have any questions.