@jbtaylor on tech

In my last few posts, I've explained why existing spectrum law benefits consumers and competition.

It's a law that lobbyists for AT&T and Verizon want desperately to change. When you look at spectrum holdings of the Twinn Bells, you can quickly understand why.

Consider this:

Verizon and AT&T currently hold approximately 73 percent of the most valuable spectrum below 1 GHz, when measured on a MHz-POPs basis. 

According to filings at the Securities and Exchange Commission, Verizon Wireless and AT&T today control approximately two-thirds of all the U.S. spectrum licenses, when measured in terms of book value. (Verizon's spectrum is worth $73.2 billion and AT&T's is worth $42.3 billion -- together, that's over $115 billion.

Keep in mind these numbers don't reflect the book value of AT&T's recently acquire Qualcomm spectrum or the book value of the spectrum that Verizon hopes to acquire from the cable companies.

In contrast, Sprint's spectrum book value is $20.1 billion and T-Mobile's is $15.2 billion. (Note, the T-Mobile figure doesn't reflect the book value of the spectrum it acquired from AT&T as a result of the failed AT&T/T-Mobile merger.)

So currently, in terms of book value, AT&T's spectrum is worth more than Sprint and T-Mobile's combined. And even more eye-popping, Verizon's spectrum is worth almost as much at all the spectrum held by AT&T, Sprint and T-Mobile combined.

So those are the national carriers. What about the regional carriers? Well the spectrum of the next six carriers combines to about $10 billion, which is less than T-Mobile's spectrum.

From a consumer's point of view, nothing good can come from an FCC auction which enriches Verizon and AT&T at the expense of the rest of the wireless industry and competition.

But that doesn't mean that AT&T and Verizon should be completely barred from future auctions. They shouldn't be. On the other hand, they shouldn't be able to use their immense financial resources to swamp competitors and gobble up every more of the country's spectrum. As FCC Chairman Julius Genachowski has said, the FCC's intention is that every carrier -- big, medium, or small -- that needs additional spectrum would have a meaningful chance to bid on it.

Current law gives the FCC the ability to ensure that level playing field. And make no mistake, AT&T and Verizon will do whatever they can to change the law so it will serve the needs of AT&T and Verizon. While that's great for the Twin Bells' shareholders, that's horrible for the rest of us.

p.s. While this should be obvious to anyone who reads the disclaimer on my blog's home page, some are still missing the fact that this blog reflects my personal views, not those of my employer.