AT&T to lose hundreds of 5G millimeter wave spectrum licenses as part of FCC/FiberTower settlement

The FCC announced a settlement with AT&T’s FiberTower that involves the company returning hundreds of millimeter wave spectrum licenses to the agency. The settlement essentially means AT&T won’t get access to those spectrum licenses, and it paves the way for the agency to reauction those licenses at some point in the future.

Specifically, as part of the agreement, FiberTower is abandoning all of its 24 GHz spectrum licenses (around 121 total) and roughly the same number of 39 GHz spectrum licenses, explained Brian Goemmer, president of AllNet Insights & Analytics. Goemmer’s firm carefully tracks ownership of the nation’s spectrum licenses.

Thus, those abandoned licenses will revert back to FCC ownership. So, due to its agreement to purchase FiberTower, AT&T will only get around 479 of FiberTower’s 39 GHz spectrum licenses and none of the company’s 24 GHz licenses.

In a statement to FierceWireless, AT&T said the settlement put it on track to gain roughly 360 MHz of spectrum in the 39 GHz band from FiberTower.

Importantly, AT&T must still gain approval from the FCC to acquire FiberTower’s spectrum licenses; the new settlement between the FCC and FiberTower now paves the way for the agency to issue that approval.

RELATED: AT&T, Verizon, FCC and the rest: These charts show who controls the nation’s licensed millimeter-wave spectrum

The settlement between the FCC and FiberTower appears to bring to a close years of legal wrangling about the company’s licenses. Back in 2012, FiberTower filed for Chapter 11 bankruptcy protection, and in 2014 the FCC deemed that FiberTower did not demonstrate that it had deployed a service substantial enough to meet FCC buildout requirements—thus paving the way for FiberTower to lose a portion of its licenses. AT&T though at the beginning of 2017 inked an agreement to acquire FiberTower and its licenses, and at the time AT&T argued that it should be given access to FiberTower’s terminated licenses. AT&T argued it will be a good steward of those terminated licenses and that it should be given control over them.

Others disagreed, however. T-Mobile, the Competitive Carriers Association and others argued that the FCC should not give AT&T those terminated licenses, and should instead reauction them.

RELATED: CCA urges FCC to put FiberTower licenses up for auction

Indeed, CCA today pointed out that only a small portion of FiberTower’s spectrum holdings are actually returning to FCC ownership. Specifically, the trade group said that, of FiberTower’s 738 total licenses, 650 were in dispute, and FiberTower is only losing around 100 of those that were in dispute.

“The FCC’s Order on Remand and settlement agreement with FiberTower is a disappointing update in the FCC’s review of the pending AT&T/FiberTower transaction, especially in light of the fact that the majority of FiberTower’s licenses expired long ago and should be reauctioned,” CCA President Steve Berry said in a statement to FierceWireless. “If the pending transaction [between AT&T and FiberTower] is approved, the terms of the settlement agreement will afford FiberTower a financial windfall for sitting on unconstructed licenses for years and AT&T a windfall to acquire valuable 5G spectrum. This will send a harmful message to industry competitors and consumers, who may have greatly benefitted from an auction of these licenses.”

Millimeter wave spectrum (generally licenses above 20 GHz) has received significantly more attention in recent years largely due to the industry’s move toward 5G network technology. Transmissions in millimeter wave spectrum bands can’t go as far as transmissions in lower bands, but they can transmit far more data. Thus, AT&T, Verizon and other carriers are planning to center much of their 5G efforts in millimeter wave bands.

Indeed, Verizon earlier this month closed its acquisition of Straight Path, which held a wide range of millimeter wave spectrum licenses.

Allnet’s Goemmer said that, unlike AT&T’s FiberTower settlement, the FCC placed no restrictions on Verizon’s acquisition of Straight Path’s licenses, and that thanks to that deal Verizon now owns roughly 30% of all available licensed millimeter wave spectrum. He said AT&T owns much less millimeter-wave spectrum than Verizon.

“With the recent approval of the Verizon/Straight Path and Verizon/Nextlink transactions, it is a real concern that these transactions have provided the largest incumbents an even more dominant position while transitioning to next-generation technologies. This also will reduce the amount of spectrum available for competitive carriers on the secondary market and at auction, which will negatively impact competition and ultimately consumers,” CCA’s Berry said. “All carriers, not just the largest two, should have the opportunity to acquire additional spectrum resources. CCA hopes the Commission will work to revive the competitive spirit by ensuring competitive carriers have meaningful opportunities to acquire additional spectrum resources.”