AT&T, Verizon fault FCC wireless decision on leases

AT&T Inc and Verizon Wireless faulted federal regulators for adopting restrictions on airwave leases the two companies can negotiate with a wholesaler of wireless Internet service.

The Federal Communications Commission on March 26 approved Harbinger Capital Partners Funds’ acquisition of SkyTerra Communications Inc, a Reston, Virginia-based provider of mobile satellite services that plans to sell access to operators of high-speed wireless data, or broadband, networks.

The FCC required SkyTerra to seek approval before leasing capacity to “the largest or second-largest wireless provider,” a condition Harbinger had proposed. Verizon Wireless, owned by Verizon Communications Inc. and Vodafone Group PLC, is the biggest wireless company, followed by AT&T.

“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 an e-mailed statement. “This action is manifestly unwise and potentially unlawful.”

The FCC’s “process and the resulting restrictions are troubling,” said David Fish, a Washington-based spokesman for Verizon, in an e-mail message.

The requirements on Harbinger “do not prohibit any specific transactions,” Paul de Sa, chief of the FCC’s Office of Strategic Planning and Policy Analysis, said today in a blog posting. “They do provide some reassurance that the approval will ignite new broadband competition while protecting the public from any potential harms.”

Harbinger plans “to provide expanded choices to consumers” with a service “complementary to existing network service providers,” said Josh Lefkowitz, a spokesman for the company who works for Burson-Marsteller.

SkyTerra spokesman Tom Surface didn’t reply to a telephone message.

Harbinger said in a March 26 statement that it will combine SkyTerra’s airwaves with its own spectrum for resale to other companies. SkyTerra will combine land-based and satellite equipment to offer broadband services to retailers, potentially reaching 260 million people, New York-based Harbinger told the FCC, according to the agency.

“The FCC’s broadband policies have given us the confidence to make a series of investments that will bring new competition and innovation to all Americans,” Harbinger Chief Executive Officer Philip Falcone said in the statement.

Rural areas not served by existing providers will be covered, Harbinger told the agency. Harbinger told the FCC it expects to have 40 million consumer devices connected to the network by 2015.