AT&T "Welcomes" Idea of Spectrum Caps?

You wouldn’t normally expect any market leader to support possible new regulatory action that might actually limit the amount of spectrum, or the types of spectrum, any mobile service provider can own.

But the unexpected AT&T view of the Federal Communications Commission’s intention to review both spectrum holding limits and spectrum quality considerations--essentially “welcoming” such a review could point to an AT&T belief that uncertainty is a bigger problem than spectrum limits.

Also, AT&T could be betting that other competitors will suffer more than it will if new limits on spectrum ownership were to emerge.

Or, some might argue, AT&T simply has decided that confrontation with the FCC has limited utility, at least in this case, the reason being that AT&T itself has a number of important spectrum purchases lined up for FCC approval.

AT&T is attempting to buy about $2.6 billion worth of spectrum to catch up with Verizon Wireless. AT&T has proposed at least 24 deals in the past four months for the rights to spectrum.

Verizon already has won U.S. approval to buy airwave rights from Comcast Corp. and three other cable companies for $3.9 billion.
Many AT&T users might agree that AT&T needs more spectrum, just as Sprint customers using that firm’s 4G network (WiMAX) might complain that performance is slower than it used to be.

AT&T’s plans would boost its most important spectrum holdings by 62 percent in the biggest 100 U.S. markets, according to John Hodulik, a UBS AG analyst.

There’s no question bandwidth demand is growing. The issue is really “how fast?” and “what can be done” to better use existing spectrum resources.

Still, under normal circumstances, one would expect a market leader to oppose the notion that there should be caps on the amount of spectrum any single provider can own. What therefore needs “explanation” is why AT&T would essentially say it welcomes the possibility of such caps.

Many, after all, would argue that control of spectrum is essential for market control. If new competitors cannot get spectrum, they can’t be in the business. On the other hand, such limits are commonplace. U.S. cable operators work under the assumption that no single provider will ever be allowed to gain control of more than 30 percent of U.S. video entertainment customers.

So how does Comcast grow? Comcast sells many other services to a finite number of customers, and then gets into another business, namely programming.

Whether AT&T’s thinking is “merely” tactical (do nothing to impair approval of its immediate spectrum buys) or more long term (sooner or later we will face spectrum caps, but those caps also will affect its major competitors, and there are other sources of business advantage), the apparent lack of resistance to the notion of spectrum caps is unusual.