Rural wireless carriers seek the return of spectrum caps

By Ed Oswald, BetaNews

July 18, 2008, 3:01 PM

Tired of watching major players such as AT&T and Verizon encroach on their territory, a group of smaller providers are petitioning the FCC to bring back limits on the amount of spectrum a carrier can hold.

The complaint was brought by the Rural Telecommunications Group, which represents the interest of regional wireless operators with less than 100,000 subscribers. Its members include carriers serving so-called secondary and tertiary markets -- representing both independent carriers and those associated with rural telephone companies.

Caps were first introduced in 1994, allowing a single company to control no more than 45 megahertz of spectrum in a single market. It was later raised to 55 MHz, where it stood until its elimination in 2003.

After the elimination, FCC regulators used a 70 MHz baseline in deciding mergers, although now it stands at 95 MHz due to the fact that the agency wanted to permit license holders to hold additional spectrum thanks to the recent auction of 700 MHz frequencies.

While these would help to block mega-mergers that would hold large majorities of spectrum, it does little to stop those who are acquiring the frequencies on their own. It is here where the RTG is making its case.

Both Verizon and AT&T will now hold more than 95 MHz in at least a dozen markets across the country, which the group sees as a problem. It argues it would no longer be able to compete with these "tier one" companies due to their large holdings.

Thus it is proposing a return of the spectrum cap. No carrier would be able to hold more than 110 MHz of spectrum in a single market on frequencies below 2.3 GHz. This would prevent bigger carriers from pushing out smaller ones, the RTG seems to argue.

FCC representatives could not be immediately reached for comment.