FCC Chief Said Ready to Propose Changing Test on Spectrum Deals

Federal Communications Commission Chairman Julius Genachowski will propose altering how the agency judges whether airwaves purchases by wireless providers raise anti-competitive concerns, two officials said.

Changes would affect largest U.S. mobile carrier Verizon Wireless, AT&T Inc. and smaller wireless carriers as they buy frequencies. The companies need FCC approval as they seek to acquire airwaves to meet soaring demand for wireless data sparked by the popularity of smartphones such as Apple Inc.’s iPhone.

Genachowski will propose changes to the so-called spectrum screen at a meeting Sept. 28, said the agency officials, who spoke today on condition of not being identified because the matter hasn’t been made public. They didn’t say whether Genachowski’s proposed changes would make it easier or more difficult for companies to buy airwaves.

The FCC’s test generally limits buyers to amassing one-third of airwaves in any market. Purchases that would carry a company’s holdings beyond that threshold invite extra scrutiny from the agency, which may require companies to sell airwaves so frequencies remain available for competitors.

The agency is preparing to auction airwaves relinquished by television broadcasters to help relieve shortages for mobile carriers.

“AT&T and Verizon seem to gobble up most of the new spectrum that becomes available, which helps them cement their already-significant leads in the marketplace,” John Bergmayer, senior staff attorney with the Washington-based policy group Public Knowledge, said in an e-mail. “To limit this, it’s important to update the screen before the broadcast incentive auctions take place.”

Verizon, Cable

Opponents of Verizon Wireless’s purchase of airwaves from cable companies led by Comcast Corp., which won FCC approval Aug. 23, asked the agency to adjust the screen, for instance by assigning greater weight to some airwaves. Verizon and the cable companies argued against that approach, and the FCC didn’t change its rules during its consideration of the deal.

AT&T’s proposed purchase of No. 4 carrier T-Mobile USA Inc. would have triggered further scrutiny under the spectrum screen in more than 250 markets, FCC staff said in rejecting the deal last year.

“We appreciate this important step, which should eliminate protracted battles about these issues in individual license transfer proceedings,” Margaret Boles, a spokeswoman for second-largest U.S. wireless carrier AT&T, said in an e-mail.

The screen doesn’t distinguish between the usefulness of different airwaves, John Taylor, a spokesman for third-largest U.S. wireless carrier Sprint Nextel Corp., said in an e-mail.

“We are pleased that the commission plans to consider improvements,” Taylor said.

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