The Federal Communications Commission wants to quash Sprint and T-Mobile’s plans for partnering up in next year’s airwave auction.
The plan from Chairman Tom Wheeler, announced in a blog post on Friday, would bar auction deals between two nationwide wireless companies, as an attempt to make sure that they aren’t stacking the deck against smaller companies.
“Our goal is to promote the participation of as many parties as possible in the auction,” Roger Sherman, head of the commission’s wireless telecommunications bureau, wrote.
“If two of the largest companies are able to bid as one combined entity in the auction, their combined resources may have the effect of suppressing meaningful competition," he added. "Therefore, the item tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed.”
Most immediately, that would impact Sprint and T-Mobile, the nation’s third and fourth largest wireless providers.
The two companies, which have long been rumored to be in merger talks, have reportedly been working to pool resources in next year’s incentive spectrum auction. That would be a precursor to an official merger, executives have reportedly hoped.
The possible merger could face other hurdles, however.
Last week, the French telecom company Iliad made a $15 billion bid for a controlling stake in T-Mobile, potentially scuttling the company’s alliance with Sprint.
In addition to banning coordination between nationwide companies, the FCC’s new proposal also tries to nail down rules for how companies of different sizes should be allowed to compete in the auction.
The goal, Sherman wrote, is to “provide innovative, smaller companies the opportunity to build wireless businesses that can spur additional investment and bring more choices to consumers.”