Monday, August 04, 2014

FCC Tries to Ban the Sprint / T-Mobile Auction Partnership

If you hadn’t already heard, Sprint and T-Mobile have been working on a potential partnership for next year’s airwave auction - a precursor to an official merger, executives have reportedly hoped. However, the FCC has now stepped in to try and stop it from happening. In a blog post on Friday, Chairman Tom Wheeler announced the FCC would bar auction deals between these two nationwide wireless companies as an attempt to make sure that they aren’t stacking the deck against smaller companies.

“Our goal is to promote the participation of as many parties as possible in the auction,” Roger Sherman, head of the commission’s wireless telecommunications bureau, wrote. “If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition," he added. "Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed.”

Surprisingly, this isn’t the only hurdle the possible merger could face. Just last week, the French telecom company Iliad made a $15 billion bid for a controlling stake in T-Mobile - something that would completely negate any merger with Sprint. In addition to banning coordination between nationwide companies, the FCC’s new proposal also tries to nail down rules for how companies of different sizes should be allowed to compete in the auction. The goal, Sherman wrote, is to “provide innovative, smaller companies the opportunity to build wireless businesses that can spur additional investment and bring more choices to consumers.”