T-Mobile Wants FCC to Reject Verizon AWS Spectrum Purchase

NEWS ANALYSIS: T-Mobile says Verizon Wireless doesn't need more AWS spectrum and that proposed spectrum bands that Verizon is offering in exchange for the bands it wants to buy are undesirable and not readily usable.

Verizon Wireless may have some trouble closing the complex spectrum deal it has been trying to get through the Federal Communications Commission since last year. The deal involves an agreement by Verizon Wireless to buy unused AWS spectrum from cable companies, including Cox Communications and Comcast. In return, Verizon Wireless is proposing to offer its 700MHz A and B bands for sale to other carriers.

Currently, Verizon Wireless uses its 700MHz block C spectrum for Long-Term Evolution (LTE). However, the company said that it wants to add AWS spectrum to that mix. Not surprisingly, there are opponents. The Rural Cellular Association and T-Mobile have both filed Petitions to Deny the Verizon Wireless application. But they're not alone. A number of other advocacy organizations, most notably Consumers Union, have also objected to the planned Verizon Wireless spectrum buy.

Then on April 19, T-Mobile CEO Philipp Humm and his legal team met with the FCC's chief of the Wireless Telecommunications Bureau, Rick Kaplan, at T-Mobile's headquarters in Bellevue, Wash., to explain their concerns. The meeting, described in an ex parte letter in the FCC's files, says that Verizon Wireless doesn't need the AWS spectrum that the company plans to buy from the cable companies because Verizon Wireless isn't using the AWS spectrum it already has.

"In particular, the T-Mobile Representatives discussed the fact that, unlike T-Mobile and other wireless carriers, Verizon Wireless has not used its existing AWS spectrum in any way in the six years it has held the licenses, and that the instant transactions would add even more AWS spectrum to Verizon Wireless' unused spectrum inventory," said T-Mobile counsel Jean Kiddoo, in a letter to the FCC.

"They noted that given this dismal track record on utilization of its current AWS spectrum, it would make no sense, and would be inconsistent with the Commission's charge to ensure that spectrum transfers serve the public interest, to allow Verizon to acquire additional AWS licenses, especially at this time of an industry-wide spectrum crunch," the letter said.

T-Mobile's Tom Sugrue, senior vice president for government affairs, explained T-Mobile's position. "Verizon's announced plan to sell lower 700 MHz spectrum contingent on approval of its spectrum transaction with the cable companies is a tactical ploy designed to divert attention from its attempt to foreclose competitors from being able to acquire AWS spectrum€”the last swath of immediately usable mobile broadband spectrum likely to be available in the near term," Sugrue said in a prepared statement released to eWEEK. "This proposed sale does not mitigate the competitive harms created by Verizon's pending transaction with the cable companies that would add to its spectrum warehouse."