Skip to main content

SpectrumCo Critics Weigh In on Verizon–T-Mobile Trade

Reaction from SpectrumCo deal skeptics came thick and fast
to Verizon Wireless' announcement Monday that it had struck a new deal to trade
spectrum with T-Mobile, subject to FCC approval of both this deal and
SpectrumCo, Verizon's proposed purchase of advanced wireless spectrum from
cable operators, some of which will be part of the T-Mobile exchange.

Public Knowledge, which has been critical of the SpectrumCo
deal, was suspicious of the new proposal.

"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 Public Knowledge senior VP Harold Feld.
"As Public Knowledge has consistently pointed out, the true danger lies
not only in the concentration of spectrum in the hands of the leading wireless provider,
but with the cozy, cartel-like arrangements between Verizon, Comcast, and the
other MSOs party to the deal...The proposed license transfer from Verizon
Wireless to T-Mobile does nothing to address the ability of Verizon and its
cable partners to use its marketing and research agreements to develop a patent
portfolio capable of bringing the mobile patent wars from handsets to online

The Alliance for Broadband Competition was similarly focused
on the "cartel" issue.

"While it's nice that Verizon will cede a small portion
of its vast spectrum holdings to T-Mobile," said the group in a statement,
"that does nothing to mitigate the fact that Verizon and Cable want to
stop competing, stop investing, and stop innovating to the great detriment of
consumers and the American economy. Our position remains the same: we urge the
DOJ and FCC to continue their thorough examination of these agreements to
ensure a competitive telecommunications industry."

Verizon and the cable operators from which it wants to buy
the spectrum also have associated cross-marketing deals in which they are
selling each other's services and teaming for R&D on how to integrate wired
and wireless services. Those deals have activist groups concerned they are
getting too chummy.

"The evidence presented in Verizon's deal with SpectrumCo
definitively proves that Verizon is badly overstating its need for the cable
companies' spectrum," said policy adviser Joel Kelsey, but added: "We
will reserve our judgment on the Verizon-T-Mobile deal until more details are
disclosed, but our goal all along has been to ensure that consumers have access
to more competitive wireless market and that spectrum policy is used to
achieve, not thwart, that goal."

"The threat of job loss and higher consumer prices from
the proposed Verizon Wireless-Big Cable deal remains, even if today's
announcement resolves some of the FCC's concerns about one piece of the
agreement," said Debbie Goldman, telecommunications policy director for
the Communications Workers of America (CWA). "The CWA -- along with major
consumer groups and elected officials --  continues to voice concerns with federal
regulators about the monopolistic cross-marketing arrangement and urges
regulators to put conditions on this deal to ensure it is in the public