Spectrum Trading with Verizon and T-Mobile

Written by John Ponio    Monday, 25 June 2012 14:34

Verizon Wireless Logo

Verizon Wireless has lately been trying to buy more of the electromagnetic spectrum from cable companies like Time Warner and Comcast to use for its mobile network, much to the displeasure of other companies. T-Mobile was the loudest voice against the purchase, and it was shot down by the FCC mostly because of T-Mobile's protest. Well, Verizon and T-Mobile have just inked an agreement where in T-Mobile will buy some of Verizon's spectrum to improve their network in the Northeast where T-Mobile is generally weak, while Verizon will buy some of T-Mobile's spectrum in parts of California where T-Mobile is all ready strong, all for cash and for T-Mobile's silence. Basically, it looks like Verizon is paying off T-Mobile to not protest Verizon's purchase of more of the spectrum.

Public Knowledge, a consumer advocacy group, isn't so happy with this deal. Harold Feld, who is the legal director at Public Knowledge, said about it:

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.

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 (Multi System Operators) party to the deal," he added.

While Verizon Wireless's purchase will give them more spectrum-power, meaning the company will be closer to having a monopoly over the market, it will give better service to all involved. The same goes with Verizon and T-Mobile's agreement. T-Mobile has always struggled with coverage, and this spectrum purchase from Verizon will help them out in the Northeast region. It's hard to say whether there's more good or more bad about this deal.