T-Mobile Seeks to Block Verizon Spectrum Deal

In a filing late Tuesday, T-Mobile asked the Federal Communications Commission to halt a pending $3.6 billion deal between Verizon and Comcast, on grounds the deal would give the company an "excessive concentration" of wireless spectrum.

Spectrum is in short supply and carriers are scrambling to acquire more of it, leading to infighting between wireless industry players as number-one Verizon seeks to stay ahead in a competitive market and the number-four carrier, T-Mobile, struggles to catch up.

Verizon already has a lot of spectrum and uses it to fuel its 4G network, which is the largest in the U.S. It needs yet more bandwidth, however, to satisfy its 4G LTE network rollout plans and further its strategy to offer only data-hungry LTE phones in 2012.

T-Mobile, on the other hand, lags behind Verizon, AT&T and Sprint in spectrum and network speed. The carrier received $1 billion in spectrum last month as part of the breakup agreement after its failed acquisition by AT&T, but it isn't enough for the carrier to catch up with industry leaders.

Unlike Verizon, T-Mobile does not have an LTE network or the resources to roll one out, and continues to rely on inferior HSPA+ technology to connect its 4G devices. Keeping Verizon from acquiring more spectrum is in T-Mobile's best business interests, and it seeks to keep its more powerful rival from pulling even further ahead in the network race.

T-Mobile's appeal to the FCC also signals Verizon it must prepare for closer scrutiny of its spectrum deals, not just by regulators and lawmakers, but by industry rivals as well.

Sprint also commented on the purchase. The number-three U.S. carrier did not ask the FCC to block the deal, but suggested regulators should consider the wider implications of the agreement between Verizon and Comcast, especially in regards to cross-marketing of products.

As part of the spectrum purchase, Verizon and Comcast agreed to cross-sell products and services. For example, Verizon stores will sell Comcast cable services and Comcast will sell and promote Verizon's cell phone plans.

Analysts caution this cross-marketing agreement could set historic precedent, according to the New York Times. Phone and cable companies, once rivals, could unite in new, lucrative deals raising antitrust concerns the two industries are forming partnerships, rather than competing with each other.

Verizon and Comcast are preparing for Senate and Justice Department inquiries into their pending deal, and now T-Mobile joined its voice to the opposition, as the issue of spectrum acquisition becomes increasingly politicized and competitive.