AT&T, Verizon blast FCC rules for proposed LTE network

AT&T and Verizon Wireless are bemoaning restrictions the FCC placed on spectrum leases for a proposed nationwide LTE network.

In approving the merger of SkyTerra and private-equity firm Harbinger Capital Partners Funds, the FCC also approved a provision--which had been sought by Harbinger--that requires SkyTerra to ask for approval before leasing capacity on the network to the "largest or second-largest wireless provider." AT&T and Verizon are also being forbidden from holding more than 25 percent of the spectrum.

Verizon is the nation's largest wireless provider and AT&T is the second largest.

Harbinger plans to design and build a wholesale mobile LTE network at a cost of more than $6 billion that will be open to any company that wants to offer mobile broadband. Harbinger will use MSS spectrum, Ancillary Terrestrial Component spectrum and terrestrial-only spectrum along with spectrum hosting and pooling agreements with roaming partners to roll out the network by the second quarter of 2013.

Both AT&T and Verizon, the two biggest winner's in 2008's 700 MHz spectrum auction, voiced their displeasure with the plan. (Both Verizon and AT&T plan to roll out LTE services on their 700 MHz holdings.) AT&T said the provision will give unfair advantage to competitors, such as Sprint Nextel and T-Mobile USA, which will not have to get approval from the FCC to access the spectrum.

"The commission is setting a very disturbing precedent when it implies that it may use allocation of spectrum to manipulate the wireless market," Jim Cicconi, AT&T's senior executive vice president for external and legislative affairs, said in a statement. "This action is manifestly unwise and potentially unlawful."

"Both the bureau's process and the resulting restrictions are troubling," Verizon spokesman Jeffrey Nelson told FierceWireless. "We are reviewing our options."

The FCC, for its part, defended the restrictions. "These commitments--building out the network to 260 million Americans by 2015 and allowing the FCC prior review of potential leases of spectrum or capacity to the two largest incumbent carriers--do not prohibit any specific transactions," Paul de Sa, chief of the FCC's Office of Strategic Planning and Policy Analysis, wrote in a blog post. "But they do provide some reassurance that the approval will ignite new broadband competition while protecting the public from any potential harms."

For more:
- see this Bloomberg article
- see this Washington Post article
- see this FCC broadband blog post
- see this GigaOM post

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