Verizon Fires Back at Critics Of Spectrum Deal With T-Mobile

The Telecommunications Law Resource Center is the most comprehensive reference and news platform for communications law, covering broadcasting, cable, broadband, telephony and wireless;...

By Paul Barbagallo  

Verizon Wireless continues to counter criticism that the company's recently announced agreement with T-Mobile USA to sell some spectrum and swap other spectrum would not serve the public interest.

Verizon's critics, including MetroPCS Communications Inc., the Rural Telecommunications Group, and public interest groups Free Press and Public Knowledge, have suggested the deal was reached only to end T-Mobile's objection to three of Verizon's other pending transactions to buy spectrum from a consortium comprising Comcast Corp., Time Warner Cable, and Bright House Networks; Cox Communications; and Wireless International, Inc. for a total of about $4 billion. What is more, they argue, Verizon is not giving up much spectrum as part of the T-Mobile deal, and does not even need the spectrum it is seeking to acquire from the nation's largest cable operators.

While that question will be determined by the FCC in due course, Verizon, in an Aug. 3 filing with the agency, contends that its detractors have largely ignored the FCC's directive to comment on the “impact” of T-Mobile deal on the “spectrum aggregation issues raised in the context of this docket.”

Below 'Spectrum Screen.'

“Commenters … treated the notice as an opportunity to rehash old arguments, whether related to the impact of the proposed exchange on spectrum aggregation or not,” Verizon wrote in a letter sent Aug. 3.

In defending the proposed transactions, Verizon noted that even before its deal with T-Mobile was announced, it would still remain below the FCC's “spectrum screen” in 121 of the 136 markets, accounting for 2,531 of the 2,577 counties and 281.8 million of the 287 million MHz-POPs covered by the cable operators' licenses. (MHz-POPs is defined as the product derived from multiplying the number of megahertz associated with a license by the population of the license's service area.) The remaining 15 markets--amounting to 18 CMAs--would be only “marginally above” the screen: in eight of these CMAs, the spectrum screen would be exceeded by four MHz or less, and in 14 CMAs the overage would be nine MHz or less, Verizon said.

“The Verizon Wireless/T-Mobile transaction creates no spectrum aggregation concerns and debunks any spectrum aggregation claims raised in the [cable spectrum deals],” Verizon said. “The transaction will allow both companies to rationalize their spectrum holdings and increase capacity and will result in a net transfer of spectrum to T-Mobile--a total of approximately 390 million MHz POPs.”

Spectrum holdings are expected to play a key role in the FCC's final judgment on Verizon's proposed spectrum agreements. If the FCC approves the deals, some divestiture of spectrum assets, even with Verizon's deal with T-Mobile, is likely.

Circulation of Order by Aug. 21.

According to several sources, FCC Chairman Julius Genachowski's office is looking to circulate an order by its informal Aug. 21 deadline for completing its review of Verizon-cable deals.

Meanwhile, the FCC's Wireless Telecommunications Bureau has decided to consolidate its reviews of all of Verizon's spectrum deals.

“After review of the record … we conclude that there is a commonality of issues, particularly with respect to the aggregation of spectrum and the public interest arguments raised by the applicants and various petitioners and commenters,” the bureau said in a public notice Aug. 3.

The consolidation is not seen as delaying a final decision.


For Verizon's filing, visit http://apps.fcc.gov/ecfs/document/view?id=7021996661.