T-Mobile accuses competitor Verizon of exaggerating need for more airwaves

T-Mobile questioned Verizon's need for more airwaves in a blog post on Wednesday and urged the Federal Communications Commission (FCC) to block the company's planned deal with a coalition of cable companies.

In December, Verizon agreed to buy licenses for wireless airwave frequencies, known as spectrum, from a group of cable companies, including Comcast and Time Warner. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other’s services.

Verizon, the nation's largest wireless carrier, says the additional spectrum will allow it to expand its high-speed 4G network to meet the growing data demands of smartphones and tablet computers.

At a Senate hearing to examine the deal last month, Verizon general counsel Randal Milch claimed his company is one of the most efficient carriers in the world in its use of spectrum but that it still will not be able to keep pace with growing data demands unless it acquires more spectrum.

But in Wednesday's blog post, T-Mobile, the smallest of the four national carriers, accused Verizon of exaggerating its need for the additional airwaves.

"These deals are anything but routine and, if granted, would unduly tip the scales in favor of the largest wireless carrier at a critical juncture in the mobile broadband industry," wrote Steve Sharkey, T-Mobile's vice president of government affairs.

Verizon's analysis of spectrum efficiency is based on dividing its total number of subscribers by its nationwide average amount of spectrum.

But Sharkey argued that because spectrum holdings can vary between markets, a nationwide average is "pointless."  

He said it is unfair for Verizon to include spectrum in T-Mobile's total that the company will acquire as a result of the breakup of its deal with AT&T because the FCC still has to approve that transfer.

Sharkey also argued that the spectrum Verizon already has is superior to T-Mobile's spectrum. A majority of Verizon's spectrum is below 1 GHz, but all of T-Mobile's is above 1 GHz.

Sharkey said spectrum below 1 GHz is "considerably more efficient at providing coverage and capacity."

If Verizon had included these factors in its analysis, it would have found that T-Mobile is more efficient in all five of the top markets and eight of the top 10 markets, Sharkey said. He claimed that on average, T-Mobile is 50 percent more efficient than Verizon in its use of spectrum.

He said it is "no coincidence" that Verizon is buying up one of the last blocks of spectrum that carriers like T-Mobile could use to launch next-generation 4G Long-Term Evolution (LTE) wireless networks.

"Especially with the recent demise of our deal with AT&T, T-Mobile needs the right spectrum resources to remain a competitive force," Sharkey said.

A Verizon spokesman said his company has made a "strong case that it is in the public interest" to approve the deal, and said the company's filings with the FCC refute T-Mobile's claims.

In its filings, Verizon pointed out that the cable companies had no immediate plans to use the spectrum. The company argued the transaction will ensure that "tens of millions of consumers, businesses, and public safety and other government customers who choose Verizon Wireless to obtain high-speed broadband will continue to receive the quality service they expect."

But T-Mobile's Sharkey urged the FCC to reject the deal to give smaller carriers like T-Mobile a chance to acquire the spectrum.

"The question for the FCC, therefore, is why Verizon should be permitted to acquire more spectrum before it has even started to use much of what it already has. The simple answer is that Verizon’s effort to lock down the last remaining block of currently available LTE-appropriate spectrum should be denied," he argued.