By Brendan Sasso - 06/25/12 06:15 PM EDT
T-Mobile had urged regulators to block Verizon's deal, warning it would result in an "excessive concentration" of spectrum in the hands of the nation's largest wireless carrier. The company argued the deal would have allowed Verizon to stifle competition by closing off its competitors' access to spectrum, which all wireless devices need to transmit their signals.
T-Mobile dropped its opposition after announcing its own agreement on Monday that will allow it to buy spectrum from Verizon. The companies will also swap other blocks of spectrum with one another.
The financial details of the deal were not disclosed.
Public Knowledge, an advocacy group opposed to the Verizon-cable deal, accused Verizon of buying off T-Mobile.
"That Verizon Wireless feels the need to buy off T-Mobile to close its spectrum/marketing deals with the country's largest cable operators underscores just how bad this deal really is for American consumers and competition generally," said Harold Feld, senior vice president of Public Knowledge, in a statement.
He argued that the real competitive concern of the Verizon-cable deal is not the spectrum sale, but the marketing arrangements. He said Monday's announcement does nothing to address the "cozy, cartel-like arrangements" of the Verizon-cable deal.
Joel Kelsey, policy adviser of advocacy group Free Press, said he will reserve judgement on Verizon's deal with T-Mobile until more details are available, but he claimed "Verizon is badly overstating its need for the cable companies’ spectrum."
By agreeing to transfer spectrum to the smallest national carrier, Verizon, which is the largest carrier, could make its deal with the cable companies more enticing to regulators.
Verizon has also promised to sell off a separate block of spectrum to the highest bidder if regulators approve the cable deal.
The FCC and the Justice Department's Antitrust Division are currently investigating whether the Verizon-cable deal would harm competition.