T-Mobile Getting ATandT Spectrum, Criticizes Verizon Deal

The FCC has approved the transfer of spectrum from AT&T to T-Mobile. In the meantime, the carrier is taking steps to block Verizon Wireless from acquiring similar spectrum.

Wireless carriers' need for additional spectrum, as they race to build out 4G networks based on Long-Term Evolution (LTE) technology, continues to be a front-and-center issue. Most recently, T-Mobile announced that the Federal Communications Commission has approved the transfer of some AWS spectrum licenses to it from AT&T.

The spectrum is relevant to 128 markets, including 12 of the top 20. Along with approximately $4 billion, the spectrum was part of a fee AT&T had agreed to pay to T-Mobile, should the larger carrier's efforts to acquire the smaller carrier fail. Despite nine months of efforts to coax the FCC to allow the acquisition€”which AT&T argued was necessary for its planned LTE rollouts€”the bid ultimately failed toward the end of 2011.

"We applaud the FCC for acting swiftly to approve the transfer of these spectrum licenses," T-Mobile CTO Neville Ray said in an April 25 statement.

T-Mobile had agreed to the purchase, saying it lacked the spectrum and resources to roll out an LTE network€”an asset necessary to compete€”and so faced rather meager prospects. The AT&T parting gifts, however, have turned its situation around.

"Securing this additional spectrum was a key catalyst for our plans to launch LTE in 2013 is therefore good news for our customers," Ray added. The statement went on to say that T-Mobile will invest $4 billion "on network modernization to improve existing voice and data coverage, and to broadly deploy LTE in 2013."

T-Mobile, meanwhile, has been highly critical of Verizon Wireless' intention to purchase AWS spectrum from Comcast, Time Warner Cable and Bright House Networks, through their joint venture, SpectrumCo.

T-Mobile was among the parties that criticized the manner in which Verizon and its partners shared details of the deal with the FCC, arguing that too much information had been blocked or made vague, hindering concerned parties from reviewing the details and responding appropriately.

On April 19, T-Mobile CEO Philipp Humm and his legal team met with the members of the FCC to discuss their concerns€”which included Verizon buying spectrum that it actually didn't need.

T-Mobile counsel Jean Kiddoo, in a letter to the FCC regarding the meeting, expressed that Verizon already owned AWS spectrum that it has done nothing with for the last six years.

"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," Kiddoo continued.

The next day, working toward a similar end, the Communications Workers of America (CWA), representing a handful of organizations, including DirecTV and consumer rights group Public Knowledge, wrote to FCC Secretary Marlene H. Dortch. In the letter it argued that files submitted for review by Verizon and Spectrum Co., as well as Cox Wireless, another cable company Verizon is set to purchase spectrum from, were submitted in software that made them expensive or daunting to access€”for those actually able to access them€”and called on the FCC to "suspend the 180-day transaction timeclock to ensure a meaningful opportunity for review of the relevant materials €¦"

Should federal regulators approve the Verizon deal, it's expected to come with the provision that Verizon sell off some 700MHz B-Block spectrum€”which AT&T might know just what to do with.

This Verizon spectrum, Eric Costa, a research analyst with Technology Business Research, said in an April 24 report, "that covers 48 million [people], including four major markets, would supplement nicely with AT&T's existing B-Block spectrum."

AT&T is also expected to investigate whether it might purchase spectrum from Dish Networks or MetroPCS.