VOL. 127 | NO. 37 | Thursday, February 23, 2012
T-Mobile Asks FCC to Block Verizon-Cable Deal
PETER SVENSSON | AP Technology Writer
NEW YORK (AP) – T-Mobile USA, which just had its acquisition by AT&T blocked by regulators, is urging the federal government to block another deal in the wireless world: Verizon's planned purchase of spectrum from cable companies for $3.9 billion.
In a filing late Tuesday, T-Mobile USA said the Federal Communications Commission should stop the deal between Verizon Wireless, Comcast Corp., Time Warner Cable Inc., Bright House Networks and Cox Communications because it would place an "excessive concentration" of wireless spectrum in Verizon's hands.
With more wireless spectrum, a phone company can raise download speeds and serve more data-hungry devices like smartphones and laptops with cellular broadband.
Verizon Wireless, the country's No. 1 cell phone company, already has a relatively large amount of spectrum, while T-Mobile, the No. 4, does not.
MetroPCS Communications Inc., the fifth-largest cellphone company, also urged the FCC to block the deal. It said the parties had not provided enough information to prove that the acquisition was in the public interest.
Ten public-interest groups filed their own motions to block the deal on Tuesday, ahead of a filing deadline on Wednesday.
Sprint Nextel Corp., the No. 3 carrier, took a more measured stance. It didn't ask the FCC to block the deal outright, but said the agency should look closely at the wider implications of the deal, including the provision that Verizon Wireless and the cable companies market each other's products in their stores.
The cross-marketing has already started in some areas, with Verizon Wireless stores selling Comcast cable service and Comcast stores touting Verizon cellphone plans.
Analysts hailed the co-marketing agreement as a historic shift, because phone companies and cable companies are usually bitter rivals. Verizon Communications Inc., the New York-based majority owner of Verizon Wireless, still competes with the cable companies in providing pay-TV and broadband service.
Last week, a New Jersey's Division of Rate Counsel, a state agency that advocates for consumers, asked the FCC to block the deal, also citing the spectrum accumulation issue.
Verizon Wireless has defended the deal, saying it means unused spectrum will become available to wireless subscribers.
In early December, Verizon Wireless announced a deal to buy spectrum from Comcast, Time Warner Cable and Bright House Networks for $3.6 billion. The cable companies had bought the spectrum jointly at an FCC auction in 2006, with loose plans to start a wireless company or form a joint venture with one. Those plans never came to fruition.
The parties said they hoped to close the deal by the middle of this year.
Verizon later struck a similar but separate deal to buy spectrum held by Cox for $315 million. Cox had started setting up its own wireless service, but gave up last year, saying it would be too small to compete against the big cellphone companies.
AT&T struck a deal in March to buy T-Mobile USA for $39 billion. Antitrust regulators at the Justice Department sued to stop it, saying it would reduce competition in the wireless industry. The FCC also sought to block the deal. AT&T finally abandoned it in December.
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