FCC chief: AT&T bluffing on boycott threat

Federal Communications Commission (FCC) Chairman Tom Wheeler said he doesn’t believe AT&T will sit out of the agency's highly anticipated airwaves auction next year.

He pointed to AT&T's past insistence that it needs more airwaves for its growing mobile business.

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“I have a hard time envisioning this once-in-a-lifetime opportunity for this kind of beach-front spectrum being something that people throw up their hands and walk away from,” he said Wednesday at meeting of the FCC.

AT&T last week said it would reconsider participating in the 2015 auction based on the FCC’s rules for the auction.

The FCC has announced it will limit certain wireless companies’ participation in the auction, which involve buying airwaves from television broadcasters and selling those airwaves to spectrum-hungry wireless companies looking to boost their networks.

The agency will reserve some spectrum in each geographical area for wireless companies with less low-frequency spectrum, which travels better through buildings and further than higher-frequency spectrum, to bid on without competition from industry giants such as AT&T and Verizon.

AT&T responded to the agency’s plans by saying the bidding limitations could keep them from participating, which could threaten the FCC’s congressional mandate to raise revenue for the government through the auction.

Wheeler said he doubted AT&T would actually sit on the sidelines while other wireless companies snatch up all the valuable airwaves.

“The wireless carriers, including AT&T, have been very forceful and persuasive in making the case that the success of their ability to serve consumers, and therefore the success of their business, depends on additional spectrum,” he said.

“I find it hard to believe that somebody who has advocated so forcefully about why is it absolutely essential that they have spectrum like this would pass on the opportunity.”

Wheeler didn’t comment specifically on whether his agency is working with AT&T to “compel” the company to participate.

“Nobody is compelling anybody to participate in the spectrum auction,” he said.

“Whether the broadcasters sell or the wireless carriers buy is entirely a function of their own free will and a marketplace that we create."

During an earnings call on Tuesday, AT&T CFO John Stephens said the company feels "pretty good" about its spectrum holdings and is "interested in participating" in the 2015 auction.

"We are and have been working with the Commission to establish auction rules that will certainly promote a good result for AT&T but will also promote a successful result for the auction," Stephens said.

-- This post was updated at 5:53 p.m.