Following the failure of its merger with AT&T, T-Mobile USA is now trying to get the federal government to block Verizon Wireless’s proposed purchase of spectrum from various cable companies. Senator Al Franken has also expressed some concern about these proposed spectrum deals.
This new spectrum deal with Verizon Wireless involves Time Warner, Comcast, Cox Communications and Bright House Networks. T-Mobile, which is the 4th largest mobile network carrier in the U.S., filed its objection late on Tuesday with the Federal Communications Commission. The objection was filed on the basis that a deal like this would give Verizon, which is the top cellphone network carrier, way too much spectrum.
T-Mobile made the argument that any spectrum that Verizon would gain as a result of this deal would not be beneficial to Verizon Wireless and its customers in the short-term. It further argued that the main effect of this deal would be that it would make sure that none of Verizon’s smaller competitors, which include the likes of T-Mobile, would not be able to buy this spectrum and hence use it more intensively, more quickly and more efficiently than Verizon itself.
Verizon has yet to comment on the issue. A spokesman for the FCC also declined to comment on the issue because it is still considering, along with the Justice Department, whether or not to approve of a spectrum deal of this magnitude. These two agencies had come together earlier to block a merger between T-Mobile and AT&T after deciding that a partnership of that sort would eliminate jobs and reduce competition in the market. MetroPCS, which is an even smaller wireless company, has also filed a petition asking the FCC to block this deal. It did this on the basis that neither Verizon nor the cable companies involved had been able to sufficiently demonstrate that this deal would be in the public’s interest.
Spectrum deals of this sort allow wireless network carriers to improve their networks and enable them to handle greater amounts of customer traffic. Verizon had reached an agreement in December 2011 to obtain spectrum from the above cable companies for an amount of $3.6 billion. Verizon also had a different agreement with these cable companies that would allow the companies to market services that belonged to Verizon, and vice versa. The aforementioned agreements have already raised concerns amongst some politicians, who pointed out that agreements of this sort would put these companies, and especially Comcast and Verizon, on the same side.