T-Mobile USA, the fourth-largest U.S. wireless operator whose $39 billion merger with AT&T collapsed last year, on Tuesday asked the Federal Communications Commission to deny Verizon Wireless' agreements to purchase licenses for valuable airwaves from Cox Communications and a consortium of cable companies led by Comcast.
T-Mobile USA asserted that the agreements between the cable companies and the nation's largest mobile-phone operator aren't in the public interest because they would place more airwaves in the hands of a wireless giant that is already sitting on a chunk of spectrum.
"Now, Verizon Wireless is seeking to acquire a substantial block of unused AWS spectrum that is unlikely to provide any near-term benefits to Verizon Wireless customers (indeed, the company already holds other AWS spectrum and has not even put it to use yet)," T-Mobile USA stated in the filing. "Rather, the principal impact of the acquisition would be to foreclose the possibility that this spectrum could be acquired by smaller competitors – such as T-Mobile – who would use it more quickly, more intensively, and more efficiently than Verizon Wireless."
The acquisitions would result in less LTE capacity for 4G services in the industry "and reduced competition in the provision of LTE, which would be contrary to the public interest," T-Mobile said.
In January, the FCC opened a proceeding on the $3.6 billion deal that Verizon Wireless entered to buy 122 spectrum licenses from a joint venture (SpectrumCo) among subsidiaries of Comcast Corp., Bright House Networks, LLC and Time Warner Cable Inc. Verizon Wireless and the cable companies also announced several commercial agreements that will enable VzW and the cablecos to sell each other's products and services. The companies further revealed forming a joint venture to develop technology to better integrate wireline and wireless products and services. In a separate transaction, Verizon Wireless is purchasing licenses from Cox.
In a filing last month, the FCC said the Verizon/SpectrumCo application with the agency indicates that Verizon would be acquiring 20 or 30 megahertz of spectrum covering 259.7 million people, or roughly 84 percent of the U.S. population. Under the Verizon/Cox agreement, Verizon would be obtaining 20 MHz of spectrum covering 30 million people or about 10 percent of the nation's population, the FCC said in a public notice.
Critics of the SpectrumCo deal also are suspicious of the joint venture and co-marketing agreements between Verizon Wireless and the cable companies. In its filing, T-Mobile said the agreements "require further investigation to determine whether any illicit divisions have been negotiated."
Several players in the wireless industry as well as outsiders have weighed in on the deals, including Verizon's competitor Sprint Nextel Corp., which has asked the FCC to carefully review the agreements. Sprint's concerns extended well beyond the spectrum license transfers.
"Although the full extent of the agreements is not clear because the Applicants filed redacted versions of their agreements, the cooperative arrangements encompass wired and wireless technologies, voice, video, and data services: the full complement of 21st century electronic communications services," Sprint said in a filing. "Detailed Commission review of the proposed transactions and these arrangements is justified because they have the potential to touch each consumer and every government, business, healthcare, and educational institution in the United States."
