T-Mobile asks FCC to block Verizon-cable deal

By Brendan Sasso - 02/22/12 05:17 PM ET

T-Mobile, which just a few months ago abandoned its merger with AT&T due to opposition from the Federal Communications Commission (FCC), on Tuesday urged the agency to block Verizon's deal with a group of cable companies.

Verizon agreed to buy wireless airwave licenses, known as spectrum, for $3.6 billion from cable companies including Comcast and Time Warner in December. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other's services.

T-Mobile is the smallest of the four national wireless carriers, and Verizon is the largest.

Although T-Mobile's filing urged regulators to take a close look at the marketing agreements, the company focused most of its criticism on the spectrum sale.

"Were these transactions to be approved, Verizon would be able to warehouse even more spectrum, thereby foreclosing their competitor’s access to this critical resource," T-Mobile said in a statement. "Smaller competitive carriers, including T-Mobile, would be willing and able to deploy these spectrum resources quickly and efficiently to rollout new mobile broadband services and compete aggressively with Verizon."

All wireless carriers are looking to gain enough spectrum to meet the growing data demands from smartphones and tablet computers.

A Verizon spokesman argued the deal would benefit the public.

"It is in line with goals in the FCC’s National Broadband Plan to reallocate or repurpose unused and underutilized spectrum to higher-valued uses, and the FCC has also noted that secondary market transactions such as this one are important to ensure that existing spectrum can get into the hands of providers who can use it efficiently to serve customers," the spokesman said.

Kathleen Ham, T-Mobile's vice president of federal regulatory affairs, told The Hill that the company's opposition to the Verizon-cable deal is "completely consistent" with pursuing the merger with AT&T.

She said that both positions were driven by the need to acquire enough spectrum to power next-generation wireless technologies. The merger would have combined AT&T and T-Mobile's spectrum holdings, while the Verizon deal will close off a chunk of the airwaves to T-Mobile.

The FCC and the Justice Department blocked the AT&T/ T-Mobile deal, arguing it would have stifled competition in the wireless market and hurt consumers.

Ham also said T-Mobile was unable to compete to buy the cable companies' spectrum because Verizon announced the purchase just days before the AT&T/ T-Mobile deal collapsed.

--Updated at 6:30 p.m.