Sprint, T-Mobile and others are asking the FCC to force Verizon to share the marketing-related details of its spectrum-purchasing deals with cable companies.
Verizon Wireless was surely
hoping its deal with Comcast and three other cable companies would proceed
quietlythe mirror opposite of what happened when AT&T tried to buy
T-Mobile in 2011. But, no such luck. Sprint, T-Mobile, DirectTV, the Rural
Telecommunications Group and the Rural Cellular Association believe that too
little information about the deal has been released and are calling on the
Federal Communications Commission to halt its review until details of the
agreement have been made clear.
Separately, rivals are also
asking questions about a Verizon deal with Cox Communications to purchase some
of its spectrum for $315 million. In November 2011,
Cox announced
it was discontinuing its wireless service, citing its inability to compete in
the marketplace, and in December it announced that it was selling its 20HMz
licenses, covering 28 million people, to Verizon, and that each would become
"agents" to sell the others products and services.
"As a result of the
incomplete submissions by the applicants, neither the Commission nor interested
parties have an adequate basis upon which to assess the public interest
implications of the proposed transactions," according to a Feb. 8 letter
to the FCC signed by Sprint and the other above-mentioned parties.
Wireless
Week first reported the letter and the publication received an advanced
copy of the document from the public interest group Public Knowledge.
The letter continued,
"The Commission should suspend both the pleading cycle in this proceeding
and the informal 180-day 'transaction clock,' and reset them to zero once the
applicants have provided full disclosure of their arrangements."
Public Knowledge, along with
three companies, asked the FCC on Feb. 7 to stop its review until more
marketing-related information is released, said the report.
Facing criticism, Verizon
and Cox very quickly submitted marketing details to the FCC, though as sealed
files under a protective order.
On Feb. 3, Sprint signed
a second letter,
essentially saying they're glad Verizon filed something, but they can't respond
to something that's not public, so more information is still needed.
On Dec. 2, Verizon announced
a deal with SpectrumCo, the joint ventures between Comcast, Time Warner and
Bright House Networks, in which Verizon would pay SpectrumCo $3.6 billion for
122 new spectrum licenses for its Long-Term Evolution (LTE) network in exchange
for allowing the cable companies to resell its products and services.
"These joint-marketing
agreements will turn these rival companies into partners, rather than
competitors," wrote a concerned Sen. Al Franken (D-Minn.) in a Jan. 31
letter to FCC Chairman Julius Genachowski.
Franken
called on the FCC to hold a hearing to "further analyze the
competitive impacts of these deals," and according to
The New York Times' Bits blog,
Sen. Herb Kohl (D-Wis.) agreed that he would.
Gangbuster sales of
smartphones and tablets and the rising use of mobile video and other
data-crunching applications have created an industry anxious for more spectrum
to support users' habits. In March 2011, AT&T announced its intention to
purchase T-Mobile. The smaller carriers spectrum would be a great asset in
AT&Ts planned LTE rollouts.
In December, however, the
FCC released a report finding that the dealwhich would have made AT&T the
largest network by farwould be damaging to smaller players' ability to
effectively compete and so ultimately hurt Americans, who would face fewer
options and higher prices. Following the report, AT&T said it would stop
its pursuit for the time being.
In January, during an
earnings call, AT&T CEO Randall Stephenson described an FCC that's
"intent
on picking winners and losers" and acting as a logjam to progress.
"In the absence of
auctions, our company and others in the industry have taken the logical step of
entering into smaller transactions to acquire the spectrum we need to meet this
demand," Stephens said during the Jan. 26 call. "But even here, we
need the FCC's action and leadership, and unfortunately, even the smallest and
most routine spectrum deals are receiving intense scrutiny from this FCC, oftentimes
taking up to a year and sometimes longer before these are approved."
Sprint CEO Dan Hesse, during
that carrier's Feb. 8 earnings announcement saw the competitive landscape
differently, remarking that "the decision of AT&T to abandon its
acquisition of T-Mobile clearly provides many more opportunities for us and for
companies outside the top two to become much stronger competitors over time."
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