Verizon has come out swinging in response to a series of press announcements by the Alliance for Broadband Competition, which accused Verizon of conspiring with a group of cable companies to create an Internet cartel that would harm consumers.
The Alliance complained strongly about a Joint Operating Entity, saying that this would enable Verizon and its partners in the JOE to excessively control access to the Internet, to Web content as well as the price of Internet access. Two carriers, T-Mobile and Sprint Nextel, were particularly vocal in opposing the Verizon plan to buy spectrum from the cable companies, with T-Mobile saying it should be allowed to buy it instead.
Verizon Vice President of Policy Communications Edward McFadden provided a prepared statement to eWEEK downplaying the statements by the Alliance. “This faux-coalition is ‘old whine in a new bottle.’ The same companies and political groups, making the same claims, that have already been filed at the FCC on the SpectrumCo deal, McFadden said in his prepared statement.
In short, there is nothing new here. Verizon Wireless has responded to each of these claims in our filings on multiple occasions, has addressed them with the FCC, and is confident that we have a made a strong case on bringing unused spectrum to meet the needs of consumers is in the public interest.
While Verizons responses to much of what has been said by Alliance members are heavily redacted, McFadden provided to eWEEK a copy of an unredacted ex parte filing with the FCC from May 21 responding to T-Mobiles filing of May 15, which puts forth T-Mobiles argument why it should be awarded the Advanced Wireless Service (AWS) spectrum that Verizon plans to buy from the cable companies. T-Mobiles filing is in the form of a PowerPoint presentation to the commission.
In its response, Verizon says that T-Mobiles presentation provides nothing new. T-Mobile offers no new analysis, facts or reasons that could justify denying the pending applications to assign AWS spectrum in the secondary market. These transactions will help provide the spectrum capacity necessary for Verizon Wireless to meet consumers growing needs for 4G service. T-Mobile, however, simply repeats claims that the Applicants have rebutted in the past, Verizon says in its opening salvo against T-Mobile.
Verizon Keeps Mum on Opponents Cartel Claims
Then, Verizon uses the words of T-Mobiles own parent company against it. In fact, the only news here is the odd disconnect between T-Mobiles regulatory arguments and the business presentations of its parent company, Deutsche Telekom AG. Twice in the last two weeks, Deutsche Telekoms chief financial officer has relayed to investors the companys optimistic view of T-Mobiles future in the U.S. market:
- [W]e will have an LTE [Long-Term Evolution] offer, which is competitive enough with all the players in the U.S. market and will be launched next year.
- And by the way, at the end of the day for almost every market, we have two times 10MHz of LTE. This is giving us a clear path until 2017, 2018, whatever projection you might take with regards to data consumption on a standalone basis.
- [T]he Android market is growing nicely here in the U.S., as well. We could tap this potential. We have an empty network. We have fiber links in the backhaul. So therefore, we could really play with this capacity. And we know how huge this uptick, this growth of data is in the U.S. market. So therefore we have a clear challenger strategy as we call it here for the U.S. market.
- There is no need for us to enter into any kind of deal through at least 2018.
Then the Verizon filing suggests that T-Mobile is using the regulatory process to gain competitive advantage, and suggests that T-Mobiles arguments are, at best, made up. T-Mobiles regulatory advocacy is so different from its parents view that one can only conclude it is misusing the regulatory process solely to impede a competitors 4G plans or extract concessions.
Furthermore, Verizon suggests that T-Mobiles PowerPoint presentation contains bogus data. T-Mobiles presentation recycles its time-worn arguments about the deal. Once again, T-Mobile handpicks particular bands it calls ‘LTE spectrum’ to concoct the argument that Verizon Wireless holds, or will hold, excessive amounts of spectrum.
While suggesting that T-Mobile may have created some nice slides, Verizons filing suggests all the company is really doing is diverting attention from real measures of network efficiency. T-Mobiles most recent efficiency argument is limited to one PowerPoint slide. That showing apparently is designed to present a pretty visual for regulators and, perhaps, to obscure that its claim rests on outlier assumptions divorced from any widely accepted industry efficiency standard or legitimate means to measure network capacity or efficiency.
Verizons statement that T-Mobile is relying on recycled versions of previously rebutted claims underscores the level of the attack against T-Mobile. They have been unable to establish any legitimate basis to deny or condition the proposed license Assignments, Verizon says in its closing statement.
So far T-Mobile hasnt responded to Verizons latest round of charges, which is expected since creating an ex parte filing takes a few days.
While Verizon has made some strong arguments against T-Mobiles opposition to its application to buy spectrum from Comcast, Cox, Time Warner and other cable companies, it has not addressed the overarching complaint of the Alliance members that the company is trying to create an Internet cartel. Partly, this is because Verizon is focusing its argument on what is probably the most credible opposition and partly because some of the other filings by Alliance members have yet to fully address the issue of Internet access control by a Verizon-led cartel.