FCC May Create Spectrum Limits for Former TV Spectrum Auction

Limits on the amount of spectrum any single company can win in the proposed 600 MHz auctions of former TV broadcast spectrum could be coming. 

Sprint and T-Mobile US have argued they need such rules to ensure that each of the smaller carriers gets a reasonable amount of new low-frequency spectrum.

That matters, they argue, since Verizon Wireless and AT&T Mobility already own most of the available lower frequency spectrum, valuable in terms of better signal propagation characteristics. 

That, in turn, is important because it means better coverage with less capital investment. And such new spectrum would allow both smaller firms to better compete with AT&T and Verizon.

According to a Bloomberg report, Federal Communications Commission Chairman Tom Wheeler will propose such limits.

AT&T Iand Verizon have argued such purchase limits will reduce revenue the government reaps from the spectrum sale, something that is important because of the way the FCC plans to create incentives for broadcasters to sell their spectrrum in the first place.

The easiest way to do so is to provide high spectrum rights payments. But spectrum set-asides likely will reduct the amount of money available to pay broadcasters to voluntarily relinquish their licenses. 

Some might also note that spectrum set-asides also will reduce the amount of money the federal government can hope to raise, but that is a secondary consideration. The bigger risk is that the revenue raised will not be sufficient to convince broadcasters to give up their spectrum rights.