C Spire sues AT&T, others for allegedly blocking its 700 MHz plans

C Spire Wireless accused AT&T (NYSE:T), Qualcomm (NASDAQ:QCOM) and Motorola Mobility (NYSE:MMI) of working together to push it and other small regional carriers out of business by manipulating the standards process for creating band classes in the 700 MHz band.

The antitrust lawsuit, which C Spire, formerly known as Cellular South, brought in April in the U.S. federal court in the Northern District of Mississippi, alleges that AT&T and its vendor partners controlled the ecosystem that sets standards, and essentially shutting C Spire and other competitors out. In effect, C Spire said the move prevented it from obtaining suitable LTE devices and network roaming. The lawsuit was unearthed by CNET.

The lawsuit revolves around a familiar issue that has been burbling up in the industry since last year. The issue of 700 MHz interoperability pits smaller carriers with spectrum in the Lower A Block--including Vulcan Wireless, King Street Wireless (U.S. Cellular's bidding partner), C Spire Wireless and MetroPCS (NYSE:PCS)--against larger carriers, primarily AT&T. The smaller carriers operate in Band Class 12 while AT&T operates on Lower B and C Block 700 MHz spectrum in Band Class 17. The smaller carriers argue that without interoperability, device makers will cater to the needs of AT&T and Verizon Wireless (NYSE:VZ), which operates in Upper C Block 700 MHZ spectrum in Band Class 13.

C Spire's lawsuit alleges that AT&T, along with Qualcomm and Motorola, pushed the 3GPP process toward creating Band Class 17, which excludes the Lower A Block licensees. C Spire said AT&T's size and heft in the industry helped it out-muscle the smaller carriers, and that Qualcomm threatened to retaliate against C Spire for bringing the issue to the FCC. AT&T has said it created Band Class 17 to guard against interference from Channel 51 broadcast transmissions adjacent to Lower A Block spectrum. The FCC is currently exploring 700 MHz interoperability in an open proceeding.

"We agree with other companies named in the suit that C-Spire's allegations are without merit, and we have asked the Court to dismiss the complaint," AT&T said. AT&T has said in litigation it filed seeking to dismiss the case that C Spire could not prove it did not have a technical reason for creating Band Class 17.

"Plaintiffs' effort to mount an antitrust attack on [AT&T's] role in 3GPP standard-setting fails to state a claim because the complaint fails to allege any agreement among [AT&T] and the other defendants to convert the 3GPP process into an anti-competitive sham," AT&T said in the filing. "All that the complaint alleges is Cellular South's disagreement with the consensus judgment reached through the legitimate 3GPP process; Cellular South's remedy for that disagreement was through the 3GPP process itself."

Earlier this week C Spire and its allies filed a study with the FCC that they said showed that "transmitters and Channel 51 TV stations do not pose an interference threat to Lower B and C block device reception." They said this showed AT&T had not technical justification for creating Band Class 17.

"The filing is little more than a dressed-up version of a study previously filed and refuted," AT&T responded in a statement. "In short, the study proves little more than 'garbage in' will produce 'garbage out.'"

C Spire said until the issue is resolved it plans to launch LTE services not on its 700 MHz spectrum but on its AWS and PCS spectrum. U.S. Cellular, which also owns Lower A Block 700 MHz spectrum, has deployed two LTE devices so far, with plans to launch several more by year-end. A U.S. Cellular spokesman confirmed that the company is using its 700 MHz spectrum for LTE.

For more:
- see this CNET article
- see this Clarion Ledger article
- see this separate CNET article

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