The FCC has received at least six filings to protest plans by Verizon Wireless to acquire AWS spectrum from four of the nation’s largest cable companies. Of these, the one that seems likely to have the greatest impact is the one from T-Mobile.
As several news reports have noted, the filing accuses Verizon Wireless of hoarding spectrum. But an equally or even more compelling argument from T-Mobile’s filing is that the commission should not rely on the “spectrum screen” traditionally calculated to determine whether or not to approve a proposed spectrum purchase. That screen looks at a company’s overall spectrum holdings and, according to T-Mobile, “the present screen is inadequate because it fails to recognize the vast difference in value between the low (below 1 GHz) and high (above 1 Ghz) frequency bands.”
“This is like assessing landholdings in acres only without considering the differences in land value based on location,” wrote T-Mobile in the filing.
As an alternative, T-Mobile urged the FCC to adopt a “value-weighted spectrum screen.”
T-Mobile noted that Verizon Wireless already has extensive holdings of valuable low-frequency spectrum which it said, provide a “significant advantage in the industry migration to LTE as the new wireless broadband standard.”
In comparison, T-Mobile said “smaller competitors are largely relegated to the higher frequency ranges, which are more difficult to deploy due to their propagation and building penetration characteristics.” If the cable companies’ spectrum holdings were instead acquired by a smaller competitor such as T-Mobile, the spectrum would be used “more quickly, more intensively and more efficiently” than Verizon Wireless would use it, T-Mobile said.
In a separate filing with the FCC, the Rural Cellular Association joined T-Mobile in asking the commission to develop a new spectrum screen. “The current spectrum screen is outdated and broken,” said RCA President and CEO Steven K. Berry in a statement. “When evaluating spectrum transactions, the FCC should consider the different values of spectrum based on propagation characteristics or consider adopting a screen that is different for dominant carriers like the Twin Bells.”
Verizon Vice President of Wireless Policy Development Charla Rath attempted to counter such arguments in a blog post. “Verizon is two times more efficient with our spectrum than T-Mobile,” argued Rath. “While Verizon Wireless services 109 million connections with an average of 88 megahertz, T-Mobile has 50 MHz to serve 33 million customers.”
Consumer groups, other competitor filings
Other FCC filings about the Verizon Wireless spectrum purchase plans made the usual arguments about the company’s growing market dominance. A joint filing from consumer groups and special interest groups, for example, argues that “the proposed transactions will lead to increased spectrum consolidation in the hands of the largest wireless service provider in the United States.”
Making the filing were the Media Access Project, Public Knowledge, New America Foundation, Benton Foundation, Center for Rural Strategies, the National Consumer Law Center, Writers Guild of America and the Future of Music Coalition. The latter two groups apparently joined in because of concerns that co-marketing plans between Verizon Wireless and the cable companies will limit their opportunities by minimizing competition on the content front.
Two other Verizon Wireless competitors—MetroPCS and Sprint—also have made filings with the FCC about the proposed spectrum purchase. According to a report by the Huffington Post, MetroPCS argues that the parties did not provide enough information to show that the deal was in the public interest, while Sprint Nextel’s concerns related primarily to the co-marketing agreement.
As Telecompetitor has previously reported, the Communications Workers of America also has filed a petition with the FCC about the Verizon- cable company deal, urging the commission to impose certain conditions on the spectrum deal.