Verizon Joins ATandT in Spectrum Protest

The two largest U.S. wireless carriers object to provisions imposed by the Federal Communications Commission on Harbinger Capital's acquisition of SkyTerra Communications. The FCC rules Harbinger must have agency approval before selling spectrum to AT&T or Verizon.

Verizon Wireless has joined AT&T in objecting to the Federal Communications Commission's restrictions on Harbinger Capital Partners, a private equity firm which intends to sell spectrum for a nationwide, wholesale Long-Term Evolution network. The FCC, though, is requiring Harbinger to seek its approval before leasing capacity on the network to the "largest or second-largest wireless provider."

Under the terms of the deal, AT&T and Verizon are forbidden from holding more than 25 percent of the spectrum.

Harbinger completed its acquisition of SkyTerra Communications March 29 in all-cash deal for $262.5 million. Harbinger hopes to build an LTE network using both terrestrial and MSS spectrum following the acquisition. AT&T and Verizon argue the FCC's action is not consistent with the open networks concept of the National Broadband Plan.

"The process used to include these conditions in the SkyTerra order was deeply flawed and inconsistent with the transparent, open and fact-driven decision making that has been an early hallmark of your chairmanship," Verizon General Counsel Steve Zipperstein wrote in a petition to FCC Chairman Julius Genachowski.

AT&T raised similar objections in a petition filing.

"These commitments-building out the network to 260 million Americans by 2015 and allowing the FCC prior review of potential leases of spectrum or capacity to the two largest incumbent carriers-do not prohibit any specific transactions," Paul de Sa, chief of the FCC's Office of Strategic Planning and Policy Analysis, wrote in a blog post. "But they do provide some reassurance that the approval will ignite new broadband competition while protecting the public from any potential harms."