The FCC forgot rules that limit the amount of spectrum any one entity can control in a geographic area long enough for AT&T and Verizon to establish effective monopolies in the 700MHz band while also keeping control of their other mobile frequencies. Now the rules have returned. I’m sure we’ll stick with those rules until the Death Star of Darth V would like them to be temporarily rescinded again….

According to Michael L. Katz in an August 19, 2008 paper titled, “An Economic Analysis of the Spectrum Component of the Federal Communications Commission’s Merger Review Screen,” the first two components of the screen were based on traditional market share measures and examine the level of market concentration and the change in concentration to which the transaction under consideration would give rise. The third screening component examined whether the merged entity would hold licenses covering more than 95 MHz of spectrum. In short, the FCC’s standard competitive analysis practice is first to define the relevant product and geographic markets, then to apply an initial screen to the spectrum holdings of the applicants, and then to conduct a market-by-market analysis of the markets captured by the initial screen.

This three-part screen was used by the FCC in the AT&T/Dobson merger, the Verizon Wireless/Rural Cellular merger, and in the Verizon Wireless/Alltel merger. However, on the same day the FCC conditionally approved the Verizon/Alltel merger, the FCC released its Auction 73 — Union Telephone/Verizon Wireless Form 601 decision in which it noted its intention going forward to expand the commission’s use of the three-part screen. In the decision, the FCC for the first time stated that it “intend[s] to apply prospectively [its] standard competitive analysis to spectrum acquired via auction as well as via transactions.” In other words, from now on, the FCC will apply its 95 MHz spectrum screen to both forms of spectrum acquisition — via auction and acquisition. (RCR Wireless)