Where there are more people, there are more customers which therefore create opportunity for more revenue. Logically, carriers focus on urban and regional areas compared to small rural towns and suburbs for business. This is what allows both Verizon and AT&T to get the majority of their business from larger, regional areas and few customers from rural and suburban. The FCC is trying to spread business to those small towns by expelling package bidding during the 600 MHz auction.
This will become a major disadvantage for both AT&T and Verizon. Spreading their spectrum to smaller carriers in small areas in the middle of nowhere takes away from their business. Verizon and AT&T both feel that the FCC has made a bad decision by not allowing package bidding in this auction.
It is more economical for the market to have package bidding because it means small carriers would not be able to make individual bids on separate segments within the package. Both the FCC and the Competitive Carriers Association (CCA) believe that package bidding leaves a major gap between the success of small carriers and major ones in big cities. They feel it favors bigger companies and regional areas, taking business away from rural areas and carriers.
However, the FCC is willing to compromise. It may still not be enough to please Verizon and AT&T, but it is something. They will allow bidders to choose between bidding on a larger package or an individual PEA, which is not in the package. PEAs serve as a compromise between the rural and urban areas and carriers, the scarce and the busy.
Though it is important to expand business among smaller carriers that do not usually have the chance to do big business, it is also understandable why both Verizon and AT&T are upset.
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