Tilting auction rules for Sprint, T-Mobile called a mistake
Setting aside more radio spectrum for Sprint (S) and T-Mobile (TMUS) in an upcoming government auction of airwaves for wireless services could endanger a successful auction, says consulting firm Recon Analytics. The Federal Communications Commission risks rattling TV broadcasters, who would sell spectrum in the auction, by creating rules that prevent AT&T (T) and Verizon Communications (VZ) from bidding on a large chunk of the airwaves, says Roger Entner, founder and lead analyst of Recon. “The fewer the restrictions, the smaller the set-asides, the more revenue will be generated during the auction,” Entner said. “This is a particularly important consideration for the incentive auction where the demands of the broadcasters will have to be met before the U.S. treasury will get its cut.” Both Sprint and T-Mobile have enough spectrum on a per-subscriber basis, weakening their case for government policy that would tilt auction rules in the favor, said Entner…