FCC Shoots Down Sprint/T-Mobile Idea of Joint Bidding at Airwaves Auction

Federal regulators shot down any hope of Sprint and T-Mobile working together to buy airwaves at an upcoming auction next year, circulating a proposal Friday that would ban such joint bidding.

In a blog post, FCC wireless bureau chief Roger Sherman outlined the proposal, saying national carriers would be banned from bidding together although smaller wireless providers could continue to do so.

“Our goal is to promote the participation of as many parties as possible in the auction. 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 wrote. “Therefore, the [proposal] tentatively concludes that joint bidding arrangements between nationwide providers should not be allowed.”

Earlier this month, reports suggested that SoftBank’s Sprint and T-Mobile were in talks to form an independent joint venture to bid in the upcoming auction for airwaves currently used by TV stations.

The airwaves are among the most valued in the wireless industry because signals can travel through walls and over long distances on them, which means carriers can use fewer towers to build a network.

In the blog post, Sherman also took aim, albeit vaguely, at a brewing controversy at the agency, which recently gave a waiver to a private equity fund run by an Obama fundraiser which would allow the firm to bid for airwaves at a discount using a program designed for minority-owned small businesses. The program gives bidding discounts to small businesses building or operating wireless networks.

“Some may try to take advantage of [the rules’] flexibility to gain a discount for large incumbents, which we will not allow,” Sherman wrote in the blog post. “We will be on the lookout for such abuse and enforce our rules vigorously.”

House Republicans launched an investigation this week about the waiver, which was given to Grain Management, run by David Grain, a frequently contributor to Democratic candidates. The firm leases its airwaves to AT&T and Verizon.

This article originally appeared on Recode.net.