By Andrew Feinberg - 03/27/12 05:22 PM EDT
Verizon's acquisition of radio spectrum owned by a group of cable companies would not serve the public interest, T-Mobile said Monday in comments filed with the Federal Communications Commission.
In particular, T-Mobile took issue with Verizon's claim that it desperately needs to purchase more spectrum to serve its user base, calling its analysis of its own spectrum usage self-serving and inaccurate.
The wireless carrier is seeking FCC approval of an agreement with a consortium of cable companies that purchased wireless spectrum but never deployed a service. The agreement would let Verizon use the cable companies' spectrum in exchange for selling their video services to its wireless customers.
Verizon's claim that it uses its existing spectrum more efficiently than T-Mobile "collapses upon closer examination," T-Mobile said.
Not only does Verizon oversimplify the analysis by presenting a nationwide data set when spectrum is actually analyzed market-by-market, but it also makes inaccurate assumptions about user demand and spectrum efficiency, making Verizon's efficiency metric "invalid in two critical respects," T-Mobile said.
T-Mobile explained that its network serves more data-intensive smartphone users compared with Verizon's user base, which has more customers but fewer smartphones.
In addition, the spectrum used by T-Mobile is higher-band spectrum that is "inherently less efficient," the company said. Despite Verizon's claim that it is using the spectrum it owns in the most efficient possible way, its actual spectral efficiency is exceeded by T-Mobile by an average of "more than 50 percent," the company said, adding that the FCC shouldn't approve the transaction based on Verizon's supposedly inaccurate claim that it has exhausted its available spectrum.
“The Commission should not allow its review of these Transactions to be hamstrung by mechanistic reliance on an outmoded spectrum screen," T-Mobile said.
But Michael Marcus, a former adviser to the FCC's spectrum policy task force, told The Hill that T-Mobile's claim of having less efficient spectrum doesn't hold water outside of large rural areas.
"That's an oversimplification," he said, adding that T-Mobile paid the same amount for its spectrum that Verizon paid. But neither carrier needs more spectrum that badly, he argued.
"What [carriers] need is capacity," Marcus said, which he defined as "a function of spectrum, infrastructure and technology."
Carriers are creating an "imbalance … in the push for more capacity," unnecessarily focusing on acquiring more spectrum rather than using what they have more efficiently. Carriers are "amazingly uncreative" in how they manage their networks, Marcus said.
A Verizon spokesman defended the spectrum deal, saying "we've got charts that lay out where we are with spectrum what we're up against. … We've been very specific about what we're going to use this for and how we're going to use it."
—This post was updated to reflect Verizon's reaction.