U.S. FCC rejects T-Mobile request to limit spectrum for AT&T, Verizon

By Alina Selyukh

WASHINGTON (Reuters) - The U.S. Federal Communications Commission on Thursday denied T-Mobile US Inc's request that more airwaves be set aside for smaller wireless companies like itself to bid on during a government auction next year.

The unanimous vote by the five-member commission came after months of T-Mobile's lobbying for stricter limits for AT&T Inc's and Verizon Communications Inc's participation in the auction of prized low-frequency airwaves.

Reuters previously reported that agency staff had found existing restrictions were sufficient to ensure that smaller carriers get a chance to outbid AT&T and Verizon, which dominate those low frequencies.

The auction, tentatively slated to start in March, will be a landmark one for the U.S. wireless industry as it will give participants their first chance since 2008 to buy low-frequency airwaves, which are valued for their ability to carry heavy data over long distances and through obstacles such as buildings.

The FCC voted last year to curb participation of carriers that held dominant slices of low-frequency airwaves in each market by reserving a piece of spectrum for bidding only by non-dominant carriers, but not to the extent T-Mobile sought.

The vote was something of a compromise among the FCC's Democrats, who wanted to give smaller carriers a leg up while ensuring that restrictions on the big carriers would not cut the proceeds of the auction, expected to be the agency's largest.

T-Mobile representatives did not immediately respond to a request for comment.

The company's shares were down 1 cent at $40.73 in midday trading, while Verizon dipped 0.6 percent and AT&T fell 1.3 percent.

(Reporting by Alina Selyukh; Editing by Susan Heavey and Lisa Von Ahn)