T-Mobile and others have asked the FCC to block Verizon's deal with four cable companies, saying it would give the company an "excessive concentration" of spectrum.
T-Mobile and nine public interest groups are asking the Federal
Communications Commission to stop the proposed deal between Verizon
Wireless and Cox Communications, as well as a second agreement between Verizon
and SpectrumCo, a joint venture between cable companies Comcast, Time Warner
Cable and Bright House Networks.
The deals, worth $3.9 billion in total, would transfer a
considerable amount of spectrum to Verizon, which is already the nation's
largest mobile carrier. In T-Mobile's Feb. 21 filing, the carrier said the deal
would give Verizon an "excessive concentration" of wireless spectrum,
according to a report from the Associated
The Rural Telecommunications Group (RTG), one of the nine public interest groups, said in a Feb. 22 statement that the move was an "unprecedented step" to take away choices from American consumers. RTG's general counsel, Carri Bennet, added:
Rural markets and rural consumers will be impacted along with urban markets if these transactions are approved. By concealing the facts through confidential, highly redacted documents, Verizon Communications and Verizon Wireless are ensuring that the public cannot participate in the process leaving millions of consumers, including those living in and traveling to rural America, in danger of higher prices and less choice.
The deal is also thought to be troublesome regarding how
Verizon and the cable companies will sell one another's products, an
Sen. Al Franken (D-Minn.) has said
would turn "these rival companies
into partners, rather than competitors. In the end, it would result in higher
prices and fewer choices for consumers, said Franken.
On Feb. 8, Sprint, T-Mobile, DirectTV, the Rural
Telecommunications Group and the Rural Cellular Association also wrote to the
that its investigation into the deal be halted
until details about said
marketing arrangements were made clear.
"Neither the Commission nor interested parties have an
adequate basis upon which to assess the public interest implications of the
proposed transactions," the letter said. 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."
New Jersey's Division of Rate Counsel, a state consumer
advocacy agency, last week also asked the FCC to block the deal, likewise
citing the "spectrum accumulation issue, according to the AP.
Verizon has defended the deal, saying it will make unused
spectruma coveted resource these daysavailable to wireless subscribers,
according to reports.
A need to free up or acquire spectrum is an often-repeated
mantra among wireless carriers, since these companies are selling record
numbers of smartphones and tablets to subscribers who are paying rising
The carriers need increasing allotments of spectrum to
support the ecosystems they've helped create.
AT&T fought for nearly a year to acquire the nation's
fourth-largest carrier, T-Mobile, though to no avail. While AT&T executives
argued that T-Mobile's spectrum would enable AT&T to roll out high-speed wireless
broadband to more Americans, the FCC was ultimately uncomfortable allotting so
much spectrum to one carrier, fearing it would devastate the ability of a smaller
carrier to competejust as T-Mobile has suggested that the Verizon deal
with the cable companies would.
Comcast and its partners purchased the spectrum at an FCC
auction in 2006. When plans to create a wireless company didn't come together, Comcast
worked out the deal with Verizon, which both companies announced in December.
AT&T CEO Randall Stephenson,
frustrated by the lack of available spectrum to build out AT&T's planned
LTE network, said
during a recent earnings call
that the FCC needs to hold more auctions, and quickly.
"The key for us is spectrum,"
said Stephenson. "We need the FCC and Congress to ... get us to a point of
open auctions, and that needs to be done as soon as possible."
In the absence of FCC auctions, RTG's Bennet added in the statement, "Verizon Wireless is systematically attempting to corner the market for commercial mobile wireless spectrum while simultaneously stripping existing and potential competitors of all their spectrum holdings. This practice is anti-competitive and a violation of antitrust law and should result in the FCCs denial of all of the applications filed by Verizon Wireless.