T-Mob, MetroPCS Try to Block Verizon-MSO Deal

T-Mobile US Inc. and MetroPCS Inc. (NYSE: PCS) have filed petitions urging the Federal Communications Commission (FCC) to deny Verizon Wireless 's proposed deal to purchase Advanced Wireless Services (AWS) spectrum from four cable MSOs for about $4 billion.

T-Mobile, still smarting from its failed merger with AT&T Inc. (NYSE: T), argued in its filing that the agreement, which aims to transfer AWS licenses from Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Bright House Networks and Cox Communications Inc. , would give Verizon Wireless an "excessive concentration" of capacity and an unfair advantage over its smaller competitors as they migrate to Long Term Evolution (LTE). (See T-Mobile Breakup Causes $6.7B Q4 Loss for AT&T and AT&T Drops Bid to Acquire T-Mobile.)

MetroPCS took a different approach, urging the FCC to suspend the process on grounds that it can't take a proper position on the proposal without obtaining more info about the separate service bundling agreements put together by Verizon Wireless and the cable operators.

Several other companies and organizations, including Sprint Corp. (NYSE: S) and DirecTV Group Inc. (NYSE: DTV), have asked the FCC to provide unredacted details of the service bundling component. Verizon Wireless and the MSOs have agreed to provide all of those details to the FCC and U.S. Department of Justice in order to keep the spectrum deal process moving forward. However, they've balked at a broader disclosure, claiming that service bundling portion of the deal will move ahead with or without approval of the spectrum deal, and that providing those sensitive details to competitors would harm them down the road.

T-Mob: Don't let Verizon Wireless 'warehouse' spectrum
T-Mobile, meanwhile, claims that it's in a position to apply cable's AWS spectrum toward LTE deployments faster and more efficiently than Verizon Wireless can, but the proposed deal takes that option off the table for the smaller carrier.

"Verizon Wireless, with its extensive holdings of valuable low-frequency spectrum, already has a significant advantage in the industry migration to LTE as the new wireless broadband standard," T-Mobile said, noting that it doesn't have excess spectrum that it can "first warehouse" and "later deploy LTE" on.

T-Mobile claims that its spectrally efficient techniques to serve 34 million subs "can only take it so far," and that the spectrum it stands to gain from the failed AT&T deal "will face serious constraints in seeking to expand its delivery of the latest generation of broadband services." (See T-Mobile Gets Spectrum in AT&T Breakup.)

T-Mobile goes on to propose that the FCC adopt a "value-weighted spectrum screen" to update the inventory of available and suitable spectrum, claiming that such an analysis would cause the FCC to conclude that the deal isn't in the public interest because it "will cause substantial harm to competition."

Why this matters
Verizon and the cable MSOs will need the FCC's blessing to move ahead on the proposed spectrum deal. The petitions to block the deal represent one of several salvos that the deal will face as it comes under scrutiny at both the FCC and the DoJ.

The process still has a ways to go. According to the FCC's pleading cycle, Tuesday was the deadline for petitions to deny, with oppositions due March 2.

For more
Catch up on the proposed deal.

— Jeff Baumgartner, Site Editor, Light Reading Cable

shygye75 12/5/2012 | 5:41:56 PM
re: T-Mob, MetroPCS Try to Block Verizon-MSO Deal

T-Mob -- is that a Jersey-based outfit?

digits 12/5/2012 | 5:41:55 PM
re: T-Mob, MetroPCS Try to Block Verizon-MSO Deal

Are you talkin' to me?

shygye75 12/5/2012 | 5:41:53 PM
re: T-Mob, MetroPCS Try to Block Verizon-MSO Deal

Not that Jersey, the one west of the Hudson... where we leave the gun and take the cannoli.

AESerm 12/5/2012 | 5:41:52 PM
re: T-Mob, MetroPCS Try to Block Verizon-MSO Deal

"I don't need tough guys, I need more lawyers." M. Corleone

Sign In