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Cable Technology Feature Article

February 22, 2012

T-Mobile Seeks to Halt Verizon Spectrum Acquisition

By Chris Freeburn, Web Editor

Fresh from seeing its attempted merger with AT&T collapse under pressure from regulators, T-Mobile (News - Alert) filed a request with the Federal Communications Commission (FCC) to stop Verizon from acquiring wireless spectrum from a group of cable companies.

The spectrum deal between Verizon Wireless (News - Alert), Comcast, Time Warner Cable, Bright House Networks and Cox Communications is valued at $3.9 billion, according to the Associated Press (News - Alert) (AP). The cable companies purchased the spectrum at a 2006 federal auction with plans to launch a new wireless venture, the AP said. The new venture never materialized and the cable companies agreed to sell the spectrum to Verizon in December.

In its FCC (News - Alert) filing, T-Mobile alleges that the acquisition would allow Verizon to create an “excessive concentration" of wireless spectrum. The AP notes that Verizon, the largest cell service provider in the U.S., currently controls a significant amount of wireless spectrum, while T-Mobile has rights to relatively little.

T-Mobile received support in its bid to halt the Verizon purchase from MetroPCS Communications Inc., ranked just behind T-Mobile as the fifth largest U.S. cell carrier, as well as ten public interest groups who independently filed petitions to block the acquisition, the AP reported. The T-Mobile filing also follows last week’s request to the FCC from the New Jersey Division of Rate Counsel to kill the spectrum purchase on similar grounds.

Other cell carriers, like Sprint Nextel (News - Alert) Corp., requested that the FCC investigate the proposed spectrum purchase, especially the cross-marketing of Verizon and cable company products, the AP said. Verizon Wireless retail outlets now offer Comcast cable service while Comcast outlets now promote Verizon cellular phone and data plans. According to the AP, the cross-promotion between Verizon and its cable allies represents a new paradigm compared to the usual competition between cellular and cable providers, both of which offer phone, broadband and TV services.

Verizon Wireless argues that the additional spectrum will benefit consumers, resulting in faster service to wireless devices like tablets and smartphones, according to the AP.

Chris Freeburn is a Web Editor for TMCnet.

Edited by Rich Steeves

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