Introduction

T-Mobile CEO John Legere speaks during news conference during July 2013 in New York. Mary Altaffer/AP

While T-Mobile US Inc.’s purchase of airwaves this week may help it better compete with bigger wireless carriers, it also may give AT&T Inc. — already among the biggest lobbying forces in Washington — fodder for convincing regulators not to limit an upcoming spectrum auction.

The $2.4 billion T-Mobile deal to purchase valuable frequencies from Verizon Wireless announced yesterday gives AT&T another concrete example to cite in its argument against putting limits on how much spectrum it can buy in an auction scheduled for 2015: the wireless market is becoming more competitive as companies like T-Mobile buy more airwaves that allows it to build a better network, and AT&T shouldn’t be hamstrung.

That’s the point Joan Marsh, AT&T’s head of its federal regulatory office, made last month when testifying before the Senate’s Commerce, Science and Transportation Committee prior to T-Mobile’s airwaves purchase.

“T-Mobile has substantially bolstered its spectrum footprint,” Marsh said in written testimony. “Over the last few quarters, T-Mobile has re-emerged as a formidable competitor. … AT&T continues to believe that an open and unrestricted auction is the best way forward.”

And AT&T will have ample opportunities to make its point. The carrier typically ranks among the nation’s biggest-spending federal lobbying entities, and in 2013, had employed 85 lobbyists, including several former members of Congress. AT&T was the 10th largest lobbying spender during 2012, at about $17.5 million, according to the Center for Responsive Politics. In 2011, AT&T spent $20.2 million and ranked eighth.

Verizon Communications was close behind, having spent $15.2 million in 2012 and placing 15th on the top federal lobbying spenders list.

It wouldn’t be surprising to see AT&T, the second-largest wireless carrier, and Verizon spend some of that money in 2014 lobbying the FCC and Congress about how upcoming spectrum sales should be run. The agency is assembling a so-called incentive auction scheduled for 2015, in which it plans to buy airwaves from television broadcasters and then resell them to, most likely, wireless carriers. The companies say they need the frequencies to meet the growing demand for data, and streaming music and videos to smartphones and tablets.

The FCC is considering putting limits on how much spectrum AT&T and Verizon can purchase at the auction, fearing the two companies will walk away with most of the valuable frequencies, and further dominate competitors and put consumers at risk. The carriers control two-thirds of the wireless market combined, according to the latest report by Strategic Analytics.

T-Mobile agreed to pay Verizon $2.4 billion in cash for a block of low-band frequencies, which travel through buildings and over long distances. These are the kind of airwaves T-Mobile needs to improve its network, which is considered of lower quality than competitors.

The deal also included T-Mobile giving Verizon frequencies worth $950 million that Verizon, the No. 1 wireless carrier, can use to relieve congestion on its networks in urban areas. The deals must be approved by the Federal Communications Commission and the Justice Department. T-Mobile said it planned to buy more airwaves.