Justice Dept: US spectrum sale must encourage competition

The Justice Department has told the FCC that the agency's upcoming spectrum auction must be geared towards spurring on competition in the industry.

The Federal Communications Commission (FCC) received a filing from the U.S. Department of Justice on Friday that documented the department's wish to see smaller wireless carriers being given a fair chance at obtaining spectrum in the auction.

The Justice Department has suggested that rules be put in place to prevent the United States' largest carriers -- such as Verizon and AT&T -- from snatching up all of the spectrum reserves. The filing reads:

"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 carriers and benefit consumers."

In order to try and give smaller carriers a fighting chance, the department has suggested that big carriers be allowed to buy "smaller blocks" of low-frequency spectrum, and even if firms such as Verizon big for larger spectrum blocks, this should be restricted or disallowed in the FCC's auction.

Low-frequency spectrum is valued due to its ability to better cater for obstacles or walls. The suggested restrictions may help carriers including T-Mobile and Sprint compete against their larger rivals, and although Verizon and AT&T express concern that the department's wish could lessen their participation in the auction, supporters argue that some larger firms may only wish to buy the spectrum blocks to keep prices as they are and keep competitors in line -- rather than utilize the resource to improve services.

Sprint's vice president of government affairs, Larry Krevor, told Reuters:

"The Justice Department is absolutely right. We are hopeful that the FCC will adopt policies which recognize the importance of low-band spectrum to wireless competition and the American economy as a whole."