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Justice Department Urges FCC to Expand Access to Low-Frequency Spectrum in 2014 Auction

In a filing that was released to the public on Friday, the Justice Department told the Federal Communications Commission that small wireless carriers deserve a fair portion of the low-frequency
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.
Michael Teague is a staff writer for Equities.com. His previous experience includes three years as the associate editor of Los Angeles-based Al Jadid Magazine, a bi-annual review of the arts & culture of the Middle East, where he contributed many articles on the region in the form of features and book & film reviews. His educational background includes a BA in French literature from the University of California, Irvine, where he developed a startling proclivity for anything having to do with the 19th century.

In a filing that was released to the public on Friday, the Justice Department told the Federal Communications Commission that small wireless carriers deserve a fair portion of the low-frequency spectrum in the auction that is to take place next year.

The case was laid out succinctly in the document: “The department concludes that rules that ensure the smaller nationwide networks, which currently lack substantial low-frequency spectrum, have an opportunity to acquire such spectrum could improve the competitive dynamic among nationwide carries and benefit consumers”.

Telecom giants Verizon (VZ) and AT&T (T) have long had more or less of a stranglehold on the provision of telephone and broadband internet services, and are concerned about increased access to the spectrum for smaller telecom companies such as Deutsche Telekom’s (DTEGY) T-Mobile, as well as Sprint Nextel (S).

Federal regulators are looking at a new set of rules that would significantly rearrange the auction process. The Justice Department’s anti-trust chief William Baer entreated the FCC to push back against any further consolidation of spectrum ownership, cautioning against any “large incumbent” who might attempt to purchase as much spectrum as possible not in order to make the best or most efficient use of it, but to keep prices high and competition out.

Friday’s filing comes as Google (GOOG) announced on Wednesday that it would be installing its Fiber broadband access in Austin, Texas and offering the service to consumers by next year, something the company has already done to great effect in Kansas City.

The company is promising faster and cheaper access to the internet, and has raised the ire of AT&T, who was quick to respond with its own deal offer to the city. It is not clear yet what the city of Austin will do about the competing offer, or what AT&T could possibly do to stop Google from executing its plans other than offering a similar, if not identical, one.

Internet access in the United States lags shockingly far behind Europe and increasingly, parts of Asia, in terms of both speed and availability. The recent actions of the Justice Department and the FCC, as well as tech companies like Google who could only benefit from increased usage of the internet in general, could have a lasting impact on the telecom duopoly that currently mediates how so many Americans access the internet.

Aside from Sprint and T-Mobile, a number of telecoms could benefit from increased share of the spectrum, including Windstream Corp. (WIN), Frontier Communications (FTR), EarthLink Inc. (ELNK), and Fairpoint Communications (FRP).

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