Verizon Calls Out T-Mobile, Reminds Them Of AT&T Deal Hypocrisy

The ongoing saga that is T-Mobile and Verizon trading barbs over Verizon’s proposed acquisition of SpectrumCo AWS spectrum has yet another round of news. Verizon’s accusing T-Mobile of hypocrisy in their attempts to block Verizon’s acquisition in light of T-Mobile’s efforts to join with AT&T to create the megacarrier to beat all megacarriers.

T-Mobile execs met with the FCC last week blasting Verizon’s proposed deal accusing Verizon of purchasing spectrum only to sit on it. T-Mobile highlighted Verizon’s existing AWS spectrum, which the company has sat on for nearly six years. T-Mobile all but accused Verizon of “hoarding airwaves” and keeping spectrum out of competitors’ hands.

Well, Verizon, Comcast, Time Warner and Bright House aren’t taking T-Mobile’s comments lying down. In a new letter to the FCC, they accuse T-Mobile of contradicting the very arguments it made last year to justify it’s $39 billion dollar acquisition by AT&T. Verizon says T-Mobile had no problem with two nationwide operators consolidating spectrum, but now it’s criticizing Verizon’s efforts on the same ground.

Verizon’s letter to the FCC:

T-Mobile now claims that there will be “serious harm to competition and to consumer welfare in the wireless market by permitting a dominant carrier to foreclose acquisition of spectrum by smaller rivals,” even though the transaction will not eliminate any competitors, will not combine businesses, and will not transfer any customers. In other words, despite its earlier claims that the combination of two top-four facilities-based providers would have no impact on competition in a fiercely competitive marketplace, T-Mobile now argues that the acquisition of a discrete block of spectrum – an only spectrum – by a carrier that needs to meet its customers’ escalating demand for mobile services will “serious[ly]” harm” competition.

… T-Mobile cannot continue to have it both ways, and its attempts to extract competitive advantages during the transaction review process should be disregarded.

In response, T-Mobile says:

[The cable operators have] not raised anything new that has not already been addressed by T-Mobile in this proceeding.  Their hodgepodge of complaints is simply a smokescreen to try to hide the serious anticompetitive impacts that would result from this highly problematic transaction.  The FCC’s focus must be on whether vigorous competition will continue following this spectrum transaction between Verizon and the cable companies.  T‑Mobile USA and many other parties have demonstrated that the long-term result would be less competition if Verizon is allowed to warehouse the last swath of spectrum likely to be available in the near term to provide meaningful nationwide competition in mobile broadband.

The question of who is right and who is wrong here is pertinent, but not as relevant as the concern that while the companies duke it out, the consumers lose. There is a spectrum shortage in this country and in order for us to finally see carriers build out their networks to the point where dropped calls and lost data connections are a minimum, something has to be done. Until then, I’ve got popcorn, this cage match between T-Mobile and Verizon is getting good.

GigaOM

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  • daghost

    Tmobile is looking like a hypocrite

    • Leachpunk

      Why? What does AT&T buying T-Mobile have to do with Verizon trying to monopolize all the AWS spectrum?

  • Gumbitter

    i cant complaint what t mobile say other carriers want to buy more spectrum and bigger carrier buying all of them and not using them for almost 6 years now. Verizon think of selling a and b block on the 700mhz and getting approval from the FCC from what i read around the web those spectrum are worth nothing compared to the spectrum they wanna buy from cable companies. Verizon gotta talk about the propose merger of att and t mobile serious if a bigger carrier then Verizon if they were in the states. if they offered them billion dollars over the value they were worth they wouldn’t take it? if they said no that’s bs that probably why t mobile did what it did i have nothing against that. that’s business a sad one but that’s business cant really stop that from happening.  when a small carrier like t mobile come up with blows like spectrum hoarding they get offended and come back with sorry comments on why they doing it. even small regional carrier feel the same way when it come to this. if everything goes well this deal would be denied and tmobile would might jump on the aws spectrum they still need more spectrum even though the fcc approved the spectrum transfer from att to t mobile they still need more to push out their lte network. just saying

  • http://toddmarshall.livejournal.com/ tommy

    Is Verizon hoarding spectrum or not? Has nothing to do with ATT&TMobile I did not hear anything about hoarding spectum there. And since the deal was dropped it’s even more pertinent, that spectrum is available not hoarded.
    Why is it that Verizon has often been untrustworthy? Even 15 years ago they were putting viruses on my computer in the name of some DSL software that was not necessary and was impossible to remove.
    What is it about Verizon? Something about their history as a former monopoly maybe? don’t know.

    • terryjohnson16

       Verizon, as well as AT&T has grown so big, by buying out the competition, and swapping spectrum from each other when an acquisition is need of approval.

      If Verizon had started using their AWS spectrum, at the same time T-Mobile did back in 2008, then there might be a valid reason for them to want more AWS spectrum.

      Verizon banked solely on their 700MHz spectrum for their LTE launch, that it bought a nationwide license. If Verizon cared, they would have asked the OEMs to make dual-banded LTE phones for them, to use 700 in the big markets, and where they don’t have capacity on it, to use AWS as a backup, similar to what AT&T is doing. AT&T is using both 700 and AWS because they don’t own nationwide 700 or AWS.

      By T-Mobile using their AWS spectrum for LTE, they will be in line with AT&T, Verizon, MetroPCS, Wind, and any other carrier that wants to use the AWS band for LTE.

      Sprint will be the old ball this time, by launching LTE on PCS 1900, and soon 800.

      T-Mobile, AT&T and Verizon don’t have enough PCS spectrum to launch LTE, so they have to use fresh spectrum, or waiting for their current old spectrum to be free, will take forever.

    • Juicebox

      Verizon installed viruses onto your computer? There’s a new one.

  • Enoel69

    1) DT was the one trying to sell Tmo USA…doubt Tmo USA was trying to sell itself to Att.
    2)This has to do purely with US carriers and US spectrum
    3)Tmo has a point…there is no reason to sell more spectrum to a Network that has been hoarding similar block of spectrum for 6yrs, thus keeping it off the hands of those who will want to utilize it right now to improve their Network and provide improved service to the consumer.
    4)Seems the hypocrisy charge is moot.

  • Trjcasper

    Verizon and the cable cos have a valid point. Tmobile isn’t wrong in their arguments either. I side with T-mobile because as a customer I stand to benefit. As American consumers we all stand to benefit if Tmobile and other smaller regional carriers are allowed to buy the spectrum in question. The competitive pressure should force prices down on both Att and Verizon.

    • http://pulse.yahoo.com/_HTL3TKBNEICYZKCU7SZQN6IRWQ v

      Not really. verizon has more spectrum and that is why they are able to deploy only LTE for their n/w. And they want to corner what little is “available”.

      • Juicebox

        I partially agree. AT&T/Tmo had the opportunity to buy the spectrum in question. They didn’t Verizon did. The spectrum is now the property of Verizon. I’m sure Verizon can sell the spectrum to T-Mobile. But I don’t expect them to give it away free when right out bought it.

  • TMOTECH

    I never thought the merger was a good idea. This spectrum transaction is different though because Verizon is simply trying to hoard the spectrum so others cannot expand their networks and compete. Remember the spectrum deal happened just as it started to look like the AT&T deal was going to fall through. Verizon saw the writing on the wall and needed to leverage itself so the Cable consortium would not have the ability to try to partner with T-Mobile when the AT&T deal fell through. Bottom line is that until Verizon decides to start using the AWS spectrum they already own they don’t have a leg to stand on. Why have all this spectrum laying around if your just going to sit on it. It is designed to impede competition.

    • Yogi

      Agreed… In my opinion, it will be the government that is the hypocritical entity if they don’t prevent the Verizon purchase. The government stalled and eventually disallowed the AT&T purchase of T-Mobile because they wanted to keep T-Mobile as a national cellular competitor. Now, T-Mobile lays out their plan to be competitive by rolling out LTE on 1700MHz. The same 1700MHz spectrum that Verizon swooped in to buy while T-Mobile’s hands were tied by the stalled AT&T purchase. This is a pretty blatant attempt by Verizon to grab the spectrum T-Mobile, the same company that the goverment just recently required to remain in competition, needs to be competitive.

      • chris125

         but verizon says they would sell the aws spectrum they don’t need so tmo still would have a chance to buy more spectrum.

  • Almamortis

    it’s funny… spectrum shortage… there’s no such thing… it’s not like crude oil… spectrum is a made up word for something that doesn’t really exist…

    • Brian Irelan

      Huh?  Spectrum is very limited which is why it is so heavily regulated.  There are only so many frequencies that we have the capability of transmitting over long distances.

  • redman12

    I’ll have to say Verizon will lose this one, even though they have a point. Verizon holding out the past spectrum for 6 years and not using it. I’m sure FCC will catch that.

  • http://pulse.yahoo.com/_HTL3TKBNEICYZKCU7SZQN6IRWQ v

    And someone tell verizon, which has been crawling under rocks ( as is their nature), that “that deal” failed and wasn’t approved.

    And verizon’s attempt at aquiring  more spectrum should ALSO fail, for the SAME reasons.

    • Juicebox

      For what “same” reasons? So Verizon’s deal should fail because the AT&T/T-Mobile deal failed. So because T-Mobile was not able to be purchased by AT&T to create a greater monopoly, Verizon should fail. (Note: Although the deal was being dealt by AT&T and DT, for all intents and purposes T-Mobile was very much in the deal to side with AT&T. Philip Humm is a huge testament to this fact.)

      So it is quite hypocritical that T-Mobile cry out foul-play due to unfair advantage when they were pushing to create a greater monopoly.

      Now, I agree that perhaps that spectrum can go to T-Mobile…for a price. After all, Verizon purchased that spectrum even though AT&T/T-Mobile had the opportunity to do so. If T-Mo wants to play business, then this is how it should be. Plain and simple. The government should not take what was sold to Verizon and give it freely to T-Mobile.

  • Yogi

    So the story pretty much goes:

    Deusch Telecom: We can’t keep T-Mobile USA competetive, so we’re just going to sell it ot AT&T.

    Goverment: No, you can’t do that because we want to keep T-Mobile as a national cellular competitor.

    T-Mobile: Okay, to be competitve, we’re going to roll out LTE on our existing AWS spectrum, but we need more.

    Verizon: Too bad, we bought all the AWS spectrum while T-Mobile’s hands were tied by the failing AT&T buyout. Yes, we already have a bunch of AWS spectrum we aren’t using, but we need more because of the spectrum crunch.

    Seems to me that the government would be pretty hypocritical if they don’t step in and push the spectrum toward T-Mobile. They shouldn’t require a company to remain a separate competitor and not allow them the tools they need to compete.

    • R123

      A couple of pieces;This was all completed in 2006. T-MO should have brought more money to the table then and bought more spectrum. 
      They could have bought it from the Cable Companies at any time. 
      They could have rolled out High Speed earlier and realized the short-falls.

      I understand the whole hands tied because of ATT (trust me I left TMO because of the merger), but TMO has been miss-managed for years. They are in this spot because of the leadership of the company. The spectrum issue with Verizon would make sense if they actually placed a bid on it or planned on it. They just want to C-Block Verizon from making a great deal. Honestly the spectrum part is small when you look at the fact that the cable companies will sell Verizon services. 

       

      • http://twitter.com/WillieFDiazSF William Diaz

        Lets get something straight, in 2006, there was no iPhone or Android, and WP5 and BlackBerry were not really consumer devices. Sure there was a trend pushing toward smartphones and feature phones on the consumer side, but I dont think any company had an idea that the iOS and Android platforms were coming, nor did they anticipate the growth or explosion of mobile apps and data. How could they have bought more, when that sort of experience wasnt even reality at that point, nor could have been predicted.
        Another thing is that T-Mobile couldnt just walk up to Cable partners and buy their spectrum, since they wouldnt sell it anyway. At that time cable companies had every intent to roll out mobile/wireless networks using the said spectrum. T-Mobile already had a nice chunk for the time it bought it.
        The spectrum purchase isnt JUST about Verizon getting more AWS spectrum to bank and sit on, its about them having contiguous licences across the USA and that also equates to their own custom built devices and very few outside devices built that arent sold by Verizon. So what? You might say… But the kicker here is that part of the reason Verizon wants the AWS and offload some of the 700Mhz spectrum is so that way they can skirt the open-device open-network clause they were forced into when they purchased the 700Mhz spectrum. This means they no longer have to support any outside devices, devices from other carriers, or allow roaming of any kind. Making their network completely (by choice and not by technological default) closed off and proprietary where they can control the entire experience to the user. Unfortunately this is not beneficial and costs the consumer not only mark up in device costs (Verizon currently sells their devices at $100 more than AT&T and Sprint for the same comparable device) but they can also raise the price since they are enhancing the “user experience”. 
        T-Mobile may not have enough to give Spectrum Co. what they want, and I dont think the FCC should force them to take a lower price for what is valued at much higher right now, but they should place stipulations on the sale of the likes that roaming and interoperability and wholesale data pricing to other companies are required and should be in place for the buyer. It should also be stipulated that Verizon can only buy the AWS spectrum if they have an outlined plan that shows they are going to use it with a reasonable built out consumer working network within 36 months. If they do not, any spectrum not used effectively (thats the key word) will be forfeited back to the FCC at no refund in price. Then T-Mobile can come along and buy it if they chose, but of course by this time, hopefully there will be LTE interoperability.

        • R123

          To be fair TMO had the opportunity to purchase / lease spectrum over the past six years, they did not do this. TMO came late to the game in data BUT they did sell it as a revenue driving piece without putting money into it. 

          But i digress

          The problem is still the management of TMO. They have continued to make poor choices in systems plans phones and people. Small items like T1 line/Data line purchase/usage from competitors IE ATT and Verizon, instead of non-compete carriers. 

          As for Verizon i’m sorry thats business. They had the money so they spent it, I dont see the problem. My point is still the same if they wanted to spectrum they could have made the offer too. 

        • chris125

           So it’s verizon’s fault the other carriers didn’t plan ahead?

  • Kjhaltz

    I’ve heard the weird stuff like AT&T owns the towers in a city near mine but Verizon owns the spectrum.

  • TMoFan

    Deflect! Deflect!

    When Randall Stephenson hatched his “brilliant” plan to buyout TMo he didn’t fly to Bellevue, he flew to Germany where they salivated over the cash and the 8% stake in at&t (at&t does well DT does well – easy money). DT sold us out plain and simple and T-Mobile was just doing what their parent was telling them to do. So vzw may have a point, that doesn’t overlook their spectrum hoarding and making this deal with SpectrumCo just as the sellout was imploding. It’s just an attempt to distract, much as a magician uses distraction techniques to draw your attention away.

    The government, through lazy oversight, created the monstrous twin bells we have today. They can redeem themselves by reigning in on the spectrum hoarding that is creating this fictitious ”spectrum crunch”. 

    • moises1204

      WELL SAID.

  • stevejobbed

    Reading through some of the filings, it seems that the FCC is also concerned with preserving free market principles. One interesting comment that comes up is that the FCC does not want to get into the business of picking and choosing winners and awarding spectrum transfers without a bidding process. In reality, is T-Mobile going to be able to outbid Verizon for this spectrum? Is the FCC going to force Spectrum Co. to take a lesser deal just because T-Mobile may need it more in the short term? Interesting to see how this will play out. 

  • http://twitter.com/WillieFDiazSF William Diaz

    It should be taken into consideration that T-Mobile USA didnt push for the AT&T buy out as much as AT&T did, and Deutsche Telekom. T-Mobile at this point, with pending cash and spectrum transactions, can’t come out openly and say, “We knew the purchase would not happen with AT&T but we were in it for spectrum and cash.” However, it should be noted that the fiasco with AT&T and T-Mobile in the long run actually saved T-Mobile and gave the FCC their wish of 4-National-Carriers. Without the potential merger and the large breakup fee, T-Mobile might have been broken off and sold piece by piece and the FCC at a loss. When you look at it this way, AT&T suddenly doesnt seem as bad as Verizon, whos going for the throat by cutting off any additional spectrum that there may be for a 4th carrier to use…something the FCC DOESNT want to happen. At this point the FCC has to do its job and determine who, what, when, where, and why each company can and can not sell or buy spectrum. It is in the best interest of the FCC to force Verizon to be more spectrum efficient with what they already have and banked away. It is in the best interest of Verizon to show that they truly can operate a strong network and urge competition, seeing as they are terrified and trying to hold T-Mobile back, it must mean T-Mobile has the truly spectrum efficient network that can build out more stable and larger than Verizon right? It is in T-Mobiles best interest to continue to invest in their network and prove they are spectrum efficient yet their growth as a true national carrier as requested by the FCC they remain, should be taken into consideration that they will need more spectrum, and since the FCC required them remain in the game, should be passing on some competitive discounted spectrum to them, as it is now their duty to do so.

  • http://twitter.com/WillieFDiazSF William Diaz

    It should be taken into consideration that T-Mobile USA didnt push for the AT&T buy out as much as AT&T did, and Deutsche Telekom. T-Mobile at this point, with pending cash and spectrum transactions, can’t come out openly and say, “We knew the purchase would not happen with AT&T but we were in it for spectrum and cash.” However, it should be noted that the fiasco with AT&T and T-Mobile in the long run actually saved T-Mobile and gave the FCC their wish of 4-National-Carriers. Without the potential merger and the large breakup fee, T-Mobile might have been broken off and sold piece by piece and the FCC at a loss. When you look at it this way, AT&T suddenly doesnt seem as bad as Verizon, whos going for the throat by cutting off any additional spectrum that there may be for a 4th carrier to use…something the FCC DOESNT want to happen. At this point the FCC has to do its job and determine who, what, when, where, and why each company can and can not sell or buy spectrum. It is in the best interest of the FCC to force Verizon to be more spectrum efficient with what they already have and banked away. It is in the best interest of Verizon to show that they truly can operate a strong network and urge competition, seeing as they are terrified and trying to hold T-Mobile back, it must mean T-Mobile has the truly spectrum efficient network that can build out more stable and larger than Verizon right? It is in T-Mobiles best interest to continue to invest in their network and prove they are spectrum efficient yet their growth as a true national carrier as requested by the FCC they remain, should be taken into consideration that they will need more spectrum, and since the FCC required them remain in the game, should be passing on some competitive discounted spectrum to them, as it is now their duty to do so.

  • Tortionist

    I guess two wrongs make a right in the wireless world.

    • mrsbelpit

      I can just picture Verizon saying, oh wait, maybe we shouldn’t have brought up that failed deal in relation to our failing deal.

  • Steven

    If Verizon is sitting on spectrum then it needs to start using more of it because the newly expanded Lte coverage here in Romeo MI SUCKS!! Full bars here but the data speeds are only on par with Att’s H+ network. 6 megs down and 2.5 up. That is NOT true Lte speeds!!!!!:(

    • Jarrod

      Yeah verizon is going to crap, there network has really slowed down. I did a test one night and was only able to get 7mbps on a galaxy nexus.

      • http://www.facebook.com/profile.php?id=710725095 Jason Crumbley

        First world problems suck, don’t they?

  • Steven

    I dont think its good to have too many wireless carriers in the mix for Lte coverage. 3 or 4 carriers creates enough competition and will effectively allow all of them to provide a faster data network nationwide instead of a bunch of smaller companies with shotty, much smaller coverage areas. Metro PCS in Detroit, for example, is an affordable company but lacks statewide 3G and 4G coverage. Therefore most of us will go with a carrier that has nationwide coverage.

  • Gouv

    Verizon has tons more cash and resources than tmo does. In the long run Verizon will likely win any battle against tmo. Just look at their enormity! They are way more expensive than tmo and yet they still gain more customers while tmo loses them, sadly. Verizon probably is trying to be anti-competitive but You have to admit that Verizon brings up a good point. T-Mobile had no problems being absorbed by AT&T for a large sum of cash and weren’t worried about the anti-competitive nature of the merger when it was convenient for them. Now that they can’t just give up and have to go on living that others are anti-competitive because it’s inconvenient for them?? Verizon definitely threw a good shot at tmo with this one. Magenta’s response wasn’t as good of a comeback as I was expecting. Like David, I say grab popcorn and watch this unfold. I still don’t think the odds are in T-Mobile’s favor.

  • Carlo hernandez

    Did anyone elsejust LOL when they saw that tweet? Hahahaha

  • Kwanzaabarnes

    Sooooo Verizon is saying they should not be stopped for basically the same reason the tmo and att deal was stopped smh. (Being too powerful) I swear children run these companies!

  • Kenrickeason

    Verizon is trying to get all the property for them selfs and trying to blocks other from doing so.

  • Ricky

    I have to agree with Verizon on this one.
    This is clear example of the double standard world we are living in. T-Mo was obviously backing the AT&T deal… With the same lame and ridiculous arguments that AT&T was using at the time. So, now… A year later… They are saying the opposite because obviously is not advantageous for them.
    I’m not saying Verizon should get all that spectrum but at least now we know how hypocrite companies are.

  • whassup

     Deutche Telekom (TMO parent company) made the decision to sell/merge with AT&T. Let’s get that straight first and foremost. T-Mobile wasn’t looking to get bought out, they were just along for the ride so that DT could get liquid assets of $39 BIL and get a piece of the action with the merger and cut their losses with their US telecom business. You need to take TMO out of the equation. TMO got a sweet deal out of the failed merger. $3BIL and spectrum from AT&T. Verizon is already powerful and like #1 in the market. What are they bitching about?

  • chris125

    yet tmo was ok with being bought out causing less competition. Nice try TMO

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  • KoseKid

    Only problem with their claim… (and a 4 year old would understand this.) if Verizon takes all the left over spectrum and stores it in a closet, how will anyone expand, or new carriers come out of the woodwork… If you take all the toys for yourself, then no one gets to play.