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US Regulatory Changes to Spectrum Rules Could Hurt Sprint

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The US telecoms regulator is looking to reclassify some of the radio spectrum holdings of the mobile networks in an effort to more accurately reflect the size of their assets.

At the moment, a block of 128.5Mhz of radio spectrum is left out of calculations affecting the impact of mergers or spectrum license sales as it is technically classified as being previously reserved for religious and social organisations.

It was however mainly used by Clearwire for its commercial WiMAX network. Clearwire is now owned by Sprint, who hold some 101Mhz of the spectrum.

The FCC is proposing to change the classification to more correctly reflect its use.

This is significant as the regulator has a so-called "spectrum screen" that it applies when a license sale is taking place where it seeks to limit any single company from holding more than a third of the available spectrum in any one area.

If Sprint sees its commercially viable spectrum holdings boosted by over 100Mhz, then it will be harder for the company to engage in transactions in the future that might increase its holdings still further.

The classification of the 2.5Ghz spectrum will take Sprint over the one-third threshold in many markets across the USA. It would also, in percentage terms alone, push the other mobile networks down a notch, making it easier for them to carry out transactions between each other.

The FCC plans to decide on the matter at a meeting  on the 15th May.

The regulator last considered the issue of the 2.5Ghz spectrum back in December 2012, when it rejected a request from AT&T to have it included in the calculations for the spectrum screen. At the time Clearwire was still nominally an independent company, and not controlled by Sprint. That situation has since changed.

On the web: Wall Street Journal

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Tags: fcc  sprint  USA