The Federal Communications Commission today posted a letter sent from a members of Congress requesting that the FCC not promulgate rules that would favor smaller carriers such as Sprint and T-Mobile.
Among the signatories were Fred Upton, Republican of Michigan and chairman of the House Committee on Energy and Commerce; Marsha Blackburn, Republican of Tennessee; Greg Walden, Republican of Oregon; Robert E. Latta, Republican of Ohio; Ed Whitfield, Republican of Kentucky; and Billy Long, Republican of Missouri. You can access a copy of their letter here.
Specifically, the members took issue with the United States Department of Justice’s request to the FCC seeking auction rules that would tip in favor of smaller carriers. What caught my attention was reference to the proposed acquisition of Sprint by Japanese telecommunications giant SoftBank, which has made a $20 billion plus offer to buy 70% of Sprint. Dish Network recently announced its offer for Sprint at a price tag of $25 billion.
The Congressmen implied that Sprint, should the merger go through, would have access to resources that would enable the company to purchase spectrum, requiring no help from specially tailored auction rules to make such a purchase.
The Congressmen make a valid point. What does it say about the DOJ and FCC’s acknowledgement of the effectiveness of market mechanisms to facilitate the flow of natural capital from one entity to another if these agencies are willing to unnecessarily intervene by tailoring rules in favor of a number of market players over another bunch of market players? All carriers should be able to compete for spectrum and allow their customers to benefit from the acquisition.
A little behind the napkin math would show that more customers nationally would benefit from larger carriers obtaining additional spectrum. It would be nice if the DOJ and FCC can show what the gain in national aggregate would be from Sprint and T-Mobile obtaining spectrum in a skewed process when their networks haven’t been built enough to serve more customers.