Sprint, T-Mobile Part of New Alliance to Stop Verizon Deals

Sprint and T-Mobile are among the members of the newly formed Alliance for Broadband Competition, which is asking the FCC and DOJ to look very closely at the potential impacts of Verizon's deals with four cable companies.

Sprint, T-Mobile and other organizations against Verizon Wireless€™ controversial agreements with cable companies Time Warner, Comcast and Bright House Networks €”together called SpectrumCo€”and Cox Communications today held a kick-off phone call with the media, introducing a newly formed Alliance for Broadband Competition.

Consumer-protection groups Public Knowledge and the Free Press, as well as the American Antitrust Institute (AAI) and Rural Cellular Association (RCA)€”The Competitive Carriers Association, are also members. All these groups, save for Sprint, had representatives on the call.

The general consensus on the call was: If Verizon is allowed to purchase from SpectrumCo the Advanced Wireless Services (AWS) spectrum that it would like to, and be allowed to continue with the joint marketing arrangement that it has already begun selling, it will facilitate a duopoly in the wireless space between Verizon and AT&T, damage competition in the cable space, hurt American consumers who are sure to see increased prices, and even eventually cause the quality of networks in the United States to trail that of lesser-developed nations because of a lack of competition to spur innovation.

Sprint, in a statement, said it feared the proposed transactions between Verizon and the cable companies could "undermine broadband competition."

"The cooperative arrangements between these companies encompass wired and wireless technologies, voice, video and data services: the full complement of 21st century electronic communications services and have the potential to touch each consumer and every government, business, healthcare, and educational institution in the United States," according to Sprint.

Attention during the call was focused on a number of areas. One was what has repeatedly been referred to as Verizon's "stockpile" of unused AWS spectrum, suggesting it doesn't need more of what the others regard as a scarce resource.

The two bands of spectrum capable of supporting Long-Term Evolution (LTE) are the 700MHz band and the AWS band. Verizon has already built an LTE network on the 700MHz band; this acquisition of AWS spectrum, on top of its "stock-piled" AWS spectrum, suggests they're keeping it from competitors who could use it to make the transition to LTE, said Kathleen Ham, T-Mobile's vice president of federal regulatory affairs.

Another area, also pointed to by Ham, is that by T-Mobile's measures, Verizon is the "least-efficient user of spectrum among the nationwide wireless carriers."

Ham further noted that T-Mobile is asking permission to view and re-tool the FCC's "spectrum screen," which she called "broken." The screen, through which the FCC views spectrum allotments, she explained, treats all spectrum equally, though the markets treat it very differently. T-Mobile believes it's important to see how the spectrum is used on a market-by-market basis and also by users.

Verizon, she pointed out, has the lowest smartphone penetration in the industry.

Still, Harold Feld, legal director of Public Knowledge, offered wryly, "It says something when the spectrum details are the easy part of the deal. It's the side deal that's the [bigger] issue."

As part of Verizon's marketing agreements with the cable companies, each€”traditionally rivals€”will offer the other's products.

"There is an odor here that suggests Verizon will cease to challenge the cable markets," said Bert Foer, AAI president.

RCA's Berry described the FCC earlier as being "asleep at the wheel" and said he hopes it will take the opportunity it has now to "really drill down into this" to identify competitive harms and "make up for lost ground."

In a statement, Carri Bennet, general counsel to the Rural Telecommunications Group, also an Alliance supporter, added:

"Verizon and the Cable Companies are truly creating an Axis of Broadband Power that threatens competition and consumer choice to their very core. Very quietly, this Axis has entered into complex transactions that will forever change how consumers access voice, Internet and video service, which companies these consumers will purchase those services from, and at the end of the day, what those services will cost. Tens of millions of Americans, including those in rural America, are now in the cross-hairs and the Alliance is ringing the warning bell calling for a stop to the onslaught before it is too late."

Verizon could not immediately be reached for a comment on the Alliance's creation or mission.