February 23, 2012
T-Mobile Urges FCC To Block Verizon Deal
After recently seeing its own attempted acquisition by AT&T shot down by federal regulators, T-Mobile´s U.S. division is now encouraging those same regulators to block Verizon´s plans to pay cable companies some $3.9 billion for their unused spectrum.
The company has encouraged the Federal Communications Commission (FCC) to break up the planned transaction, citing antitrust fears that it would place an “excessive concentration” of the available wireless spectrum under the control of one company.Access to more wireless spectrum allows a company to service a larger number of devices with faster download speeds — a definite advantage in a market where smartphones are gobbling up an ever-increasing portion of a limited spectrum.
When a service provider starts to run out of spectrum, their service typically goes down the tubes quickly, leaving competitors to snatch up their dissatisfied customers. This predicament has led to a situation in which telecommunications companies are in a mad dash to acquire new spectrum anywhere they can find it.
After lodging the official complaint with the FCC late Tuesday afternoon, T-Mobile said that the deal with major cable corporations, which includes big names like Time Warner Cable and Comcast, would give Verizon control of a dangerously large percentage of the nation´s total network.
T-Mobile has not been alone in its cries of “foulplay.” The U.S.´s fifth largest service provider MetroPCS Communications also chimed in to support T-Mobile´s petition. It argues that Verizon has not yet demonstrated that the planned purchase will be in the public´s best interest.
And outside the telecommunications industry another ten independent public-interest groups filed separate complaints on Tuesday also urging the FCC to break-up the deal.
The nation´s third largest service provider Sprint Nextel Corp. adopted a somewhat more diplomatic approach, stating that the FCC needs to closely examine the deal but declining to urge outright intervention.
Yet with a history of acrimony between cell phone and cable companies, some telecom analysts see the partnership as a welcome collaboration that´s bound to bring consumers better, more streamlined service.
Though it remains unclear whether the deal will go through, Verizon and Comcast have already launched a handful of experimental cross-marketing campaigns in several cities, with Verizon shops offering Comcast cable services and Comcast hocking Verizon´s phone plans.
Verizon Wireless has insisted that their bid to purchase unused wireless spectrum will simply make more spectrum available to consumers thus improving service and, at least in the short term, keeping down the price of wireless service.
Verizon shares fell 32 cents to $38.17 in morning trading Wednesday.
On the Net:
- Verizon Wireless
- Time Warner Cable
- MetroPCS Communications
- Sprint Nextel Corp