NEWS ANALYSIS: Verizon's divestiture of spectrum to T-Mobile is expected to eliminate one hurdle to Verizon’s plans to buy spectrum from cable companies, but other objections concerning the concentration of ownership and a lack of competition remain.
The joint announcement by Verizon and
T-Mobile that both companies had
agreed to a complex spectrum purchase and swap arrangement
eliminate T-Mobiles objections to the purchase by Verizon of Advanced Wireless
Services spectrum from a group of cable companies.
Statements made by T-Mobile to eWEEK
indicate that the deal is
contingent on regulatory approval. However, the regulatory approval has been
challenged by T-Mobile, among other entities, to Verizons plans to buy AWS
spectrum from a group of cable companies.
In a statement provided to eWEEK
by a T-Mobile spokesperson, the
company noted that it had been saying that Verizons deal with the cable
companies wasnt in the public interest, but that now T-Mobiles position had
changed. All of that happened when Verizon agreed to sell some of that spectrum
to T-Mobile, the spokesperson said.
We believed the transaction represented an
unfair concentration of spectrum in the hands of the nations largest wireless
carrier, the spokesperson said in a statement to eWEEK
. The significant spectrum divestitures by Verizon
announced today are good for competition and consumers.
The spokesperson also noted that while the
T-Mobile agreement to purchase and swap AWS spectrum is a separate transaction
from the Verizon deal to buy cable company spectrum, it is contingent on the approval
of the cable company deal. Our agreement with Verizon is subject to separate
FCC review and approval, the spokesperson said, adding, but it is contingent
upon completion of Verizons transaction with the cable companies since much of
the spectrum we are acquiring is now held by the cable companies.
While T-Mobile has not explicitly said that
it would withdraw its current objection before the FCC, it would be necessary
for that objection to be disposed of, and the fastest way for T-Mobile to make
that happen would be to withdraw its objection. T-Mobile, it should be noted,
has said it will have refarmed its existing Evolved High-Speed Packet Access (HSPA+)
spectrum to 1,900MHz and implemented a 4G Long-Term Evolution (LTE) technology
systemwide by the end of 2013.
The HSPA+ system refarming will be necessary
if T-Mobile is to offer the Apple iPhone 5 when it ships in the fourth quarter.
T-Mobile has already begun supporting iPhones by selling accessories in its
stores and providing technical support. Furthermore, the company has said that
by offering the new frequencies it will support iPhones as well as
international GSM phones in the United States. T-Mobiles first iPhone-friendly
data cell saw service at Apples Worldwide Developers Conference (WWDC) in San
Francisco in mid-June when the company launched test service there.
However, despite T-Mobiles probable
withdrawal of objections from Verizons cable company spectrum deal, other
groups remain opposed. Rebecca Mark, spokesperson for the Alliance for
Broadband Competition, said in a prepared statement that the groups objections
to Verizons agreements with the cable companies are about a lot more than