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Verizon, T-Mobile USA agree on spectrum deal

Value of package is not disclosed

NEW YORK — Verizon Wireless on Monday said that it has agreed to sell some wireless spectrum rights to T-Mobile USA and swap others, in a continuing quest to get regulators to approve a bigger spectrum deal it has worked out with a consortium of cable companies and another wireless carrier.

The deal with T-Mobile USA would improve the ability of both companies to offer fast wireless data services, Verizon said.

T-Mobile, the fourth-largest U.S. wireless company, is particularly starved for spectrum compared to its larger competitors, and regulators are likely to favor a deal that would improve its position.

Neither T-Mobile nor Verizon said what T-Mobile would pay Verizon for the spectrum. Sanford Bernstein analysts Robin Bienenstock and Craig Moffett estimated the amount at $260 million, figuring that T-Mobile is getting a roughly 50 percent discount.

The Verizon-T-Mobile deal is contingent upon Verizon getting government approval for three deals to buy spectrum from cable companies and Leap Wireless for a total of about $4 billion.

Those deals were struck in November and December, but have met resistance from public-interest groups who say the cellphone company, already the nation’s largest, doesn’t need more spectrum and shouldn’t be cozying up to competitors such as the cable companies.

T-Mobile had also opposed the Verizon-cable deals, saying they would place an “excessive concentration” of spectrum in Verizon’s hands. Verizon is the largest cellphone company in the country, and has a relatively strong spectrum position already.

Harold Feld, senior vice president at public-interest group Public Knowledge, said Verizon is trying to “buy off” T-Mobile.

“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 (cable companies) party to the deal,” Feld said.

As part of the deal, Verizon and the cable companies agreed to resell each other’s services in their stores. Verizon Communications, the New York-based phone company that controls Verizon Wireless, sells home broadband and TV services that compete with cable.

Cellphone companies need spectrum rights, or slots on the airwaves, to do business, much like radio stations do.

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