It didn't take long for Verizon (VZ) and AT&T (T) to react to Philip Falcone's plans to build a massive 4G wireless network in direct competition with the two telecom giants. Falcone is the hedge fund billionaire who runs Harbinger Capital Partners, and last Friday, Harbinger received Federal Communications Commission approval for Falcone's takeover of SkyTerra, a key component of his wireless plan. Harbinger plans to build out the huge network using the LTE (for Long Term Evolution) wireless over the next several years.
So it's not too surprising that both Verizon and AT&T are already publicly complaining about aspects of the FCC's approval.
Specifically, the country's two largest wireless companies are objecting to FCC rules that require "SkyTerra to seek approval before leasing capacity to 'the largest or second-largest wireless provider,' a condition Harbinger had proposed," Bloomberg notes. The FCC designed these rules to promote new competition in wireless, which is a central tenet of the FCC's new broadband push.
"A Very Disturbing Precedent"?
As GigaOm's Stacey Higginbotham reported, "traffic from the largest and second-largest wireless carriers in the U.S. cannot comprise more than 25 percent of the traffic over the SkyTerra/Harbinger network. This means AT&T and Verizon could not buy up huge chunks of the network or spectrum to keep others off of it."
What's your investing game plan?View Course »