The FCC awarded a sizable chunk of the 700Mhz spectrum to AT&T Mobility, giving AT&T access to 72 of the top 100 U.S. markets reaching 192 million customers. The 700Mhz spectrum, formerly used for analog television signal transmissions, is today considered a valuable asset to mobile carriers for data services.
According to Reuters, AT&T paid a mere $2.5B to Aloha Partners LP that had acquired the spectrum several years ago at low cost and never used it. The losing bidders include Google, Verizon, EchoStar Communications and Cablevision Systems.
AT&T Mobility, claiming 64 million subscribers, continues to expand its domination of U.S. wireless spectrum. The only other major GSM carrier in the U.S. is T-Mobile, which didn't bid on the spectrum and continues waffling about building its 3G network.
FCC Commissioner Michael Copps voted against the deal, according to the Associated Press, saying he believes "the transfer 'seems destined to reduce competition and diversity in the wireless marketplace.'" AT&T claims the additional spectrum will "'...meet the growing demand for spectrum-intensive wireless data and content services...more cost effectively.'"
As AT&T, formerly Cingular, extends its tentacles--grabbing valuable wireless spectrum and growing its customer base--the danger of monopolistic pricing and control over AT&T's roaming partners grows daily. Unlike carriers in the U.K., Europe and Asia, AT&T lacks healthy competition from other carriers deploying GSM technology, the world standard for cellular services.
Now that U.S. cell phone penetration has reached 250 million lines, mobile carrier marketing is re-focusing on more lucrative data services. The 700Mhz spectrum is key for U.S. carriers to increase profitability by delivering Internet-enabled handsets and applications.
The FCC and Congress should carefully consider awarding spectrum--owned by the public--to carriers capable of driving smaller competitors out of business.
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