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T-Mobile presses U.S. to change rules for sale of airwaves

The SIM card for a T-Mobile phone is illustrated in this photograph in Encinitas, California October, 27, 2014. REUTERS/Mike Blake

By Alina Selyukh

WASHINGTON (Reuters) - T-Mobile's chief executive on Wednesday called the recent U.S. auction of airwaves "a disaster" for American consumers as he took aim at rules that allowed Dish Network Corp to partner with companies that may qualify for some $13 billion in discounts.

Satellite provider Dish and biggest U.S. wireless carriers Verizon Communications Inc and AT&T Inc won most of the licenses in the record-breaking $45 billion auction of spectrum that ended last month.

In a relatively common process for Federal Communications Commission auctions, Dish and partners invested in separate companies with little to no revenue that can receive a 25 percent discount in auction bidding.

The FCC is now reviewing those entities' legal and financial independence from Dish to confirm the discounts.

Though Dish's plans for the spectrum are unclear, T-Mobile CEO John Legere criticized the FCC for allowing companies that do not provide wireless services to stock up on spectrum, without specifically naming Dish.

"This whole thing should scare the hell out of you and every other wireless consumer in the US," Legere said in a blog post, "because there is another important auction coming next year, and the results have to be different if wireless competition is going survive."

The FCC is preparing for next year's sale of highly coveted low-frequency airwaves. Legere sought to press the FCC to allocate half the spectrum for sale to smaller rivals, and not Verizon or AT&T which already control large chunks of such low-band frequencies.

Legere also said the FCC should change the rules to ensure that spectrum purchased in auction gets used "to provide service to consumers rather than allowing it to be collected and traded like financial securities."

The FCC has already planned to restrict Verizon's and AT&T's participation in next year's auction, though not to the extent sought by T-Mobile.