Wireless carriers that just bid $41.3 billion in a spectrum auction say the Federal Communications Commission's new net neutrality rules are going to kill investment.

The FCC was wrong to argue that the auction results support the agency's contention that its rules won't chill investment, the CTIA Wireless Association wrote today in a post titled "Setting the Record Straight: Auctions and Net Neutrality."

"Far from providing evidence that wireless carriers are not concerned with Title II regulations, the bidding in the AWS-3 auction reflects providers’ pent-up demand for more licensed, exclusive use spectrum in order to meet Americans’ growing mobile broadband usage," CTIA VP Scott Bergmann wrote.

The Advanced Wireless Services (AWS-3) auction began on November 13, 2014, three days after President Obama urged the FCC to reclassify fixed and mobile broadband as common carrier services in order to impose net neutrality restrictions that forbid providers from blocking or discriminating against traffic. FCC Chairman Tom Wheeler made it clear that he would take the president's advice on January 7, 2015, when the auction still had a few weeks to go. The auction ended January 29, with AT&T, Verizon Wireless, and Dish combining for $38.6 billion of the $41.3 billion in winning bids.

Comcast also claimed that the FCC's new rules "may greatly harm investment," then announced a new 2Gbps fiber-to-the-home service that it plans to roll out nationwide.

The FCC made its net neutrality vote final on February 26, while pointing to the auction and other factors to support its claim that the rules won't harm investment. Mobile voice had already operated under a Title II common carrier status since 1993, back when Wheeler was head of the CTIA; the FCC's vote this year put mobile broadband under the same type of regulatory structure.

"[B]etween 1993 and 2009 (while voice was the primary driver of mobile revenues), the mobile industry invested more than $271 billion in building out networks, during a time in which industry revenues increased by 1300 percent and subscribership grew over 1600 percent," the FCC wrote. (The CTIA disputes this argument, saying the 1993 application of a "light-touch Title II approach" to mobile voice was actually a deregulatory move, while this year's application of Title II to mobile data increases regulation.)

The FCC further pointed out that Verizon Wireless has "invested tens of billions of dollars in deploying mobile wireless services since being subject to the 700MHz C Block open access rules, which overlap in significant parts with the open Internet rules we adopt today... Finally, the recent AWS auction, conducted under the prospect of Title II regulation, generated bids (net of bidding credits) of more than $41 billion—further demonstrating that robust investment is not inconsistent with a light-touch Title II regime."

Besides all that, wireless carrier Sprint said the FCC's new rules would not harm investment in mobile broadband services. Verizon CFO Francis Shammo also said Title II "does not influence the way we invest," noting that Verizon is already a highly regulated company. Despite that, Verizon at other times has claimed that Title II poses a grave threat to "an open Internet, competition and innovation."

While the CTIA said auction bidding was driven by consumer shortage, Verizon said after bidding $10.4 billion that it did so despite already having enough spectrum.

"In a conference call with investors, Tony Melone, Verizon Communications' executive vice president of network, said that 'entering the auction there [were] no markets where we felt compelled to acquire spectrum, irrespective of the price,'" FierceWireless reported. "Verizon did not feel pressure to aggressively bid for spectrum because it already had at least 40MHz of AWS-1 spectrum in many US markets, especially in the Eastern United States, Melone said."

Spending $10.4 billion allowed Verizon to increase the number of markets where it has at least 40MHz of AWS spectrum and gain contiguity between the new AWS-3 spectrum and AWS-1 spectrum it already owned.

Dish, meanwhile, doesn't even offer cellular service yet but still bid $10 billion on spectrum through agreements with two companies that it owns. AT&T's winning bids totaled $18.2 billion, while T-Mobile US bid $1.8 billion.

The US wireless industry pulled in $189.2 billion of revenue in 2013 while making $33.1 billion in capital investments, according to the CTIA.

The most relevant auction to arguments about net neutrality is the 700MHz one in 2008, CTIA wrote. As the winning bidder, Verizon had to follow open access rules that prevent it from locking phones to its network or restricting the use of devices and applications. But while the FCC used that auction to prove net neutrality is consistent with investment, the CTIA argued that "bidders paid 70 percent less" for spectrum with the restrictions than for unrestricted spectrum.

"The relevant auction to evaluate the chilling impact of net neutrality is the 700 MHz auction, not the AWS-3 auction," the CTIA wrote.

Yet another fight over spectrum bidding is shaping up for an auction of broadcast TV airwaves scheduled to begin in early 2016. The auction is likely to draw heavy bidding because it involves low-band frequencies that can travel long distances and penetrate building walls. Wheeler wants to impose restrictions that make it easier for small carriers to buy spectrum, but T-Mobile argues that the plan doesn't go far enough, while AT&T and Verizon want to be able to bid without restrictions.