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AT&T Backs Down From Threat of Boycotting TV Airwaves Auction

In a very short game of chicken with AT&T, the FCC won.

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On Friday, FCC Chairman Tom Wheeler circulated a much-leaked proposal to restrict how many licenses the country’s two largest wireless companies can win in an auction of TV airwaves next year.

In a blog post, he said regulators need to ensure that the nation’s largest carriers, AT&T and Verizon Wireless, don’t scoop up all of the TV airwaves. The licenses being auctioned off next year are coveted by wireless companies because they allow signals to penetrate buildings and travel long distances, which makes them cheaper to use.

The rules are designed to prevent “one or two bidders” from sweeping the auction, Wheeler wrote.

As we previously reported, if bidding reaches a to-be-determined threshold, the agency plans to set aside up to 30 megahertz of airwaves in a market for companies that don’t already hold many nearby licenses. The rules are designed to make it easier for Sprint, T-Mobile and other smaller carriers to scoop up prime airwaves licenses for their LTE networks.

A senior FCC official told reporters Friday they’re trying to do a balancing act between wanting to raise money while ensuring that smaller carriers have a chance to win licenses. This is a reasonable approach, the official said.

It’s not clear if the wireless carriers will agree. When the rules were leaked last week, AT&T complained about the set-aside for smaller companies and threatened to boycott the auction.

Wheeler laughed off that threat earlier this week, telling reporters that, “I have a hard time envisioning this once-in-a-lifetime opportunity for this kind of beachfront spectrum being something that people throw up their hands and walk away from.”

Yesterday, AT&T backed down from the threat, saying, “our desire to participate in this auction and our hope for a successful auction is unchanged,” in a letter disclosing a meeting AT&T officials had with Wheeler’s aides earlier this week.

Other carriers have been silent so far on the FCC’s proposal. Spokesmen for Verizon, T-Mobile and Sprint all declined to comment Friday.

The agency plans to impose a six-year restriction to prevent companies from flipping those licenses to companies that don’t bid in the auction. It also will limit the amount of TV airwaves that will be available for unlicensed use despite lobbying from tech companies who wanted up to four TV channels set aside.

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