MetroPCS, RCA favor Verizon/T-Mobile AWS spectrum swap, but say it's not enough

In separate filings with the FCC, the Rural Cellular Association and regional carrier MetroPCS (NASDAQ:PCS) applauded Verizon Wireless' (NYSE:VZ) decision to swap AWS spectrum with T-Mobile USA, should its proposed $3.9 billion purchase of cable company spectrum be approved by the FCC and the Department of Justice. The Verizon/T-Mobile AWS spectrum swap covers 218 markets across the country, and both companies have said the deal will help their respective LTE network rollouts.

However, MetroPCS said that the proposed spectrum swap is not enough, adding that Verizon will still be warehousing broadband spectrum which is contrary to the public interest. The company further asked the FCC to conduct a market-by-market analysis of the impact on competition of Verizon's proposed spectrum purchases. MetroPCS said that analysis will show that even with Verizon's proposed sale of spectrum to T-Mobile, it will still hold 20 MHz of undeveloped spectrum throughout most of the U.S. and up to 40 MHz of unused spectrum in major markets.

T-Mobile has said the transaction will improve its spectrum position in 15 of the top 25 markets in the United States by giving it the opportunity to acquire additional AWS airwaves and to realign its existing spectrum holdings. T-Mobile said it will be able to quickly use the spectrum for LTE services, which it plans to deploy next year.

The RCA said that the divestiture deal between Verizon and T-Mobile will only partially solve T-Mobile's spectrum shortage. RCA said the transaction does nothing to resolve similar spectrum concerns that other rural operators are facing.

The RCA asked that the FCC require Verizon to divest usable spectrum to other operating entities and also require interoperability on the divested 700 MHz spectrum.

MetroPCS also noted in its filing that Verizon's T-Mobile deal fails to resolve roaming issues. MetroPCS and others have said that Verizon's pending spectrum transactions will negatively impact LTE roaming because it will remove a number of potential roaming partners, making roaming deals more difficult to negotiate. MetroPCS asked the FCC to mitigate the loss of the cable companies as potential roaming partners by assuring that their shared Wi-Fi networks are made available to others at reasonable rates.

Earlier this week, Reuters reported that FCC officials were prepared to approve Verizon Wireless' purchase of AWS spectrum from SpectrumCo (a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks) and Cox Communications. However, the Department of Justice reportedly is delaying that approval due to concerns that the proposed marketing deals between Verizon and the cable companies could hinder market competition.

For more:
- see this MetroPCS FCC filing
- see this RCA filing

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