Updated: AT&T today filed a petition with the Federal Communications Commission asking it to reconsider some of the conditions associated with an order the agency issued last Friday allowing Harbinger Capital Partners to take over a satellite company and its spectrum assets. The move means the drama in the nation’s capital as AT&T (s T) and Verizon (s VZ) gear up to fight plans by the New York private equity firm to build a competing 4G wireless network has begun.
Update: AT&T emailed to make sure our readers know that the carrier is not against Harbinger building out its network, despite my interpretation. The spokeswoman wrote, “We have no issue with and did not oppose the Harbinger/SkyTerra transaction. Furthermore, we have no objection to the wholesale wireless network that Harbinger has committed to build.”
The FCC approval of Harbinger’s buy of Skyterra helps the private equity firm consolidate spectrum, and sets in motion the PE firm’s plans to build a wholesale wireless network that would cover 260 million people by the end of 2015. But as part of the approval, the FCC set conditions that prohibit Harbinger and Skyterra from allowing AT&T and Verizon to use the spectrum without its approval, and that traffic from the nation’s two largest carriers cannot comprise more than 25 percent of the total network traffic.
The conditions were put in place to ensure a competitive wholesale network that any buyer could access, but for now, those conditions are galvanizing AT&T’s lobbying efforts into high gear. My question is, if AT&T and Verizon are upset over the conditions designed to keep them off this network and from acquiring this spectrum, how will they react if the FCC takes steps to try to remove the satellite requirement associated with the spectrum that Harbinger now owns?
Skyterra, and now Harbinger, own spectrum in the MSS band. Thanks to a 2003 FCC decision, companies that own spectrum in that band have the ability to use that spectrum to build out a combined terrestrial and satellite network. The satellite requirement has kept most of the MSS spectrum owners from building out an actual competitive mobile broadband network, but Harbinger apparently thinks the time is right.
Perhaps it’s because the National Broadband Plan, in the section on the MSS spectrum, hints that the FCC could take a new look at the satellite gating requirement that has held the development of a combined satellite and terrestrial network back since the original order. Tim Farrar, an MSS analyst, certainly thinks that’s the case, although if we think AT&T is mad now, just wait until the FCC attempts any kind of changes to that original 2003 order. I just don’t think this is going to end well for Harbinger — or for folks eager to see an open, competitive wireless network.
Image courtesy of NASA.