Verizon, which supported the AT&T merger with T-Mobile, a plan that fell apart amid opposition by federal regulators, is not getting much love from T-Mobile now.
T-Mobile joined 10 public-interest groups Wednesday in urging the Federal Communications Commission to block Verizon’s $3.9 billion wireless spectrum deal. In December, Verizon announced plans to buy 122 Advanced Wireless Systems (AWS) spectrum licenses from SpectrumCo, a joint effort between Comcast, Time Warner Cable and Bright House Networks. Later, Verizon struck a separate deal with Cox Communications to buy spectrum for $315 million.
Allocation of spectrum becomes ever more important for carriers as consumers take up bandwidth-hungry devices such as smartphones and tablets. AT&T sought the merger with T-Mobile as a way to expand and enhance its wireless network.
The Wall Street Journal quotes Verizon CEO Lowell MacAdam‘s statement of support for the merger this way:
I have taken the position that the AT&T merger with T-Mobile was kind of like gravity. It had to occur, because … [T-Mobile] had the spectrum but didn’t have the capital to build it out. AT&T needed the spectrum, they didn’t have it in order to take care of their customers, and so that match had to occur.
Regulators didn’t see the merger as inevitable, however. They considered an impediment to competition and not in the public interest.
In a filing late Tuesday, however, T-Mobile said that the Verizon pact would place an “excessive concentration” of wireless spectrum in that carrier’s hands. T-Mobile alleges that Verizon had this deal in the works even while the merger deal was seeking approval as a way to keep T-Mobile from competing for that spectrum. In its filing, T-Mobile writes:
This opportunistic accumulation of the last available spectrum is simply an attempt by Verizon Wireless to stockpile this essential resource to keep it out of its competitors’ hands and to cement an overwhelming competitive advantage.
T-Mobile is the country’s fourth-largest wireless service provider. The fifth largest, MetroPCS, also opposes the Verizon deal. No. 3 carrier Sprint Nextel Corp. simply said the agency should look closely at the wider implications of the deal.
The three cable companies teamed up to buy the spectrum in a 2006 FCC auction, but never formed the wireless company they had planned.
Among the groups filing the petition with the FCC in opposition of the Verizon deal were Public Knowledge, the Media Access Project, the New America Foundation Open Technology Initiative and the National Consumer Law Center.