Verizon’s spectrum deals are “a clear threat to competition”, says T-Mobile

T-Mobile, MetroPCS and the Rural Cellular Association have all petitioned the FCC in opposition to Verizon’s recent cable deals.

As if the recent downfall of LightSquared wasn’t enough, yet more spectrum battles have broken out in the US about Verizon’s recent bids to purchase spectrum from cable companies.

In December 2011, Verizon agreed to purchase SpectrumCo’s AWS licences for $3.6 billion, and in a separate deal also agreed to acquire Cox Communication’s 20MHz of AWS spectrum for $315 million.

These separate acquisitions have been classed together by the FCC, which is undertaking a single review on the proposed acquisitions. Final petitions from interested parties had to be submitted to the FCC on February 21 2012, and a number of Verizon’s competitors have made their disapproval of the proposals very clear.

T-Mobile’s petition argued that the FCC should “prevent an excessive concentration of mobile service spectrum holdings that is contrary to the public interest”. Claiming that Verizon Wireless already has a block of AWS spectrum which it has not put to use yet, T-Mobile’s main argument is that Verizon is acquiring more spectrum than it needs, which is relegating smaller competitors to the higher frequency ranges and making it more complicated, costly and time consuming for them to deploy LTE.

“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,” states T-Mobile in its petition. “The acquisitions will limit the deployment of LTE by competitors of Verizon Wireless and the bandwidth available for such deployments.”

Other petitions were submitted by MetroPCS and the Rural Cellular Association (RCA), which represents more than 100 competitive wireless providers across the US. Most of the RCA’s members individually serve fewer than 50,000 customers. The RCA colourfully accuses Verizon of “hoarding additional spectrum in its already well-stocked warehouse, leaving smaller spectrum-starved carriers to wither on the vine”.

For the acquisitions to go ahead, Verizon not only needs approval from the FCC. It also needs to secure the approval of the Department of Justice, and a senate committee on antitrust issues has announced that it will be holding a hearing on the acquisitions.

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