Consumer Groups Say T-Mobile Sold Out
Spectrum Offload Deal Does Nothing to Ease Verizon, Cable Worries
Consumer groups aren't too happy with T-Mobile's announcement this week they'd be conducting a spectrum swap with Verizon
in exchange for dropping their opposition to Verizon's huge marketing and spectrum deal with the cable industry. The deal is clearly a clever Verizon play to get regulatory approval for the deal -- hoping that by empowering competitor the company can soothe other anti-competitive regulatory worries the deal presents. In a statement
, consumer group Public Knowledge argues that the T-Mobile spectrum swap really does nothing to offset the problems the deal creates:
"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 video. Nor does it address the ability of these supposed competitors to block new forms of competition through Wi-Fi offload, Wi-Fi roaming, and control over the backhaul market. The parties cannot justify creating a web of anti-competitive agreements and tools for future anti-competitive collusion by divesting a handful of licenses.
Public Knowledge doesn't even really get into the competitive impact the deal will have on smaller telcos like Fairpoint, CenturyLink or Frontier. Those companies are struggling to offer even this
generation broadband technology, and likely won't fare well against the combined marketing and regulatory power of Verizon, Comcast and Time Warner Cable. Still, it's not quite clear what kind of position consistency one can expect from a company that just a few months ago (admittedly thanks to pressure from Deutsche Telekom) was repeating bogus AT&T talking points and gleefully working toward the elimination of tens-of-thousands of jobs.
·Verizon Online DSL
What's the alternative? First off, the spectrum swap can be handled completely independently of any VZ-cable shenanigans on the side.
Second, 20MHz of AWS spectrum is lying fallow right now (SpectrumCo), plus the spectrum Verizon has in the AWS band. 20MHz isn't a ton of spectrum to launch an entirely new wireless network on, so you can't count on a new burst of competition to ensue if the SpectrumCo deal falls through. On the other hand, if the spectrum gets sold, T-Mobile is strengthened (a good thing), and Verizon will eventually deploy LTE on AWS, keeping speeds nice and fast for everyone on their network.
Third, it's old-style telcos' own faults if they're failing at this point. If they invest in higher bandwidth to the home (bonded ADSL2+ at least, VDSL2 or FTTH is better) then they won't see nearly as much customer erosion to cable. They might even be able to charge more for their services, as opposed to the bargain-basement pricing that DSL has to adopt anywhere they compete with cable.
There's also nothing that prevents CenturyLink, FairPoint, Windstream etc. from partnering with the likes of Sprint or T-Mobile to bundle services. Sure, those companies would have to allow the smaller two carriers cheaper backhaul than they'd like so coverage and speeds would be decent in these carriers' footprints, but compared to seeing customers go to VZW or AT&T, with the only potential upshot being backhaul money that might or might not go to them (remember, cable providers do backhaul now), that's probably a fair price to pay.
Re: What's the alternative? CenturyLink already partners with CellCo (VZW) for cell phone service- remember the Qwest VZW deal? CentLink uses the same contract but nationally. So I'm not really sure why Centlink is bitching except to bitch.
Of course... They sold out. At the end of the day, their obligation is to their shareholders and German overlords, not American consumers. VZW dangled a way for T-Mobile to improve their spectrum position and they jumped at it. Not too surprising.
Deal would make sense if T-Mobile doesn't give spectrum to Verizon.
Verizon relinquishes supposedly accurately calculated spectrum worth "60 million" subscribers.
Verizon buys spectrum from cable companies.
Why does T-Mobile have to give up its share of spectrum? Verizon just gets win win if that ends up happening.
| |KrKHeavy Artillery For The Little GuyPremium
Another way to look it could be that T-Mobile... Believes the Verizon deal is almost certainly going to pass, and now has been able to leverage a deal for themselves to improve their position when it does.
It's clear that the Verizon/Cable deal is anti-competitive but don't expect it to be blocked..... perhaps that's how T-Mobile sees it as well.
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini
| |tiger72SexaT duorPPremium
Saint Louis, MO
Re: Another way to look it could be that T-Mobile... Honestly, between this VZW deal, the ATT deal, and the Leap deals, it's pretty clear that TMO is playing the cards they've been dealt pretty well in the past 6 months.