The spectrum swap agreement announced by Verizon and T-Mobile on Monday could clear the path for the FCC to approve Verizon's purchase of spectrum from a group of cable companies, according to analysts from Stifel Nicolaus. Until yesterday, T-Mobile had been one of the leading critics of that transaction, which critics argue would establish a communications cartel and harm competition in the cable and wireless markets. But now T-Mobile stands to receive more spectrum than Verizon from the deal, enough to cover 60 million people in exchange for other airwaves and an unspecified amount of cash.
Combined with Verizon's earlier promise to auction off its 700 MHz A and B band holdings, the wireless giant has managed to win the support of two of its three main competitors for the controversial transaction (AT&T has expressed interest in buying the 700 MHz spectrum). T-Mobile's switch has isolated the critics, which now include Sprint, small rural wireless carriers, and a number of advocacy groups including Public Knowledge. Public Knowledge released a statement yesterday suggesting Verizon had bought off T-Mobile, and reiterated their opposition to the deal. But the FCC may be more inclined to approve the transaction now that three of the national wireless providers stand to benefit from the purchase of currently unused airwaves. However, the Justice Department will still take a close look at the confidential marketing agreements attached to the transaction, and it could attach conditions intended to prevent collusion by Verizon and the cable companies.
Quotable: "Our sense is the deal would address or largely address the FCC’s spectrum concentration concerns resulting from Verizon’s planned purchase of cable AWS (advanced wireless service) spectrum. T-Mobile has been one of the most vociferous critics of the Verizon-cable spectrum transfer, arguing that Verizon should be forced to divest significant chunks of spectrum to alleviate concerns about its post-transaction spectrum holdings." — Stifel Nicolaus analysts Christopher King and David Kaut. Intelligence Chairman Praises Actions to Combat Leaks: House Intelligence Committee chairman Mike Rogers had some praise on Monday for new steps from Director of National Intelligence James Clapper aimed at combating the recent rash of national security leaks. Clapper announced the counterintelligence polygraph will now include a question about leaking classified information; the intelligence community inspector general will also look into cases where the Justice Department declines to seek prosecution. Rogers praised the plan but said bipartisan leaders in both chambers are still working on their own legislation to combat leaks. One idea, floated by Senate Intelligence Chairwoman Dianne Feinstein, D-Calif., would include expanding the investigative powers of the IGs. Lawmakers on both sides of the aisle remain publicly outraged by recent newspaper reports on classified drone strike and cyberweapon programs, reports some Republicans suggest were politically motivated. Senators Want Transparency on Trade Talks: A group of Senate Democrats wrote to U.S. Trade Representative Ron Kirk on Monday demanding more access to negotiations on the proposed Trans-Pacific Partnership free-trade agreement, which will continue next week in California. Sens. Sherrod Brown of Ohio, Ron Wyden and Jeff Merkley of Oregon, and Robert Menendez of New Jersey wrote to Kirk expressing disappointment in the lack of public information about the agreement. The senators also cite specific concerns about copyright issues, noting that there is no guarantee the language in the TPP won't resemble the controversial online piracy bills SOPA and PIPA, which were championed by the content industries but fiercely opposed by the broader Internet community. The Senators ask that the process be expanded to include advocates for Internet freedom, to counterbalance the interests of copyright holders. Sheryl Sandberg Joins Facebook Board: Facebook announced Monday that chief operating officer Sheryl Sandberg has joined the company's board of directors, making her the first woman in that position. Sandberg previously served as chief of staff at the Treasury Department under President Bill Clinton, and is frequently mentioned as a protege of former Treasury Secretary Larry Summers. Study Says Immigrants Boost Innovation: A new study from the Partnership for a New American Economy found that immigrants played a role in three out of four patents in science, technology, engineering, and math (STEM) fields at the nation's top research universities. The report also rehashes an old complaint for the tech industry, namely that the U.S. trains many of the world's top innovators at its educational institutions, then often turns them away when they attempt to stay in the country after graduation. However, critics of expanding immigration argue that companies are ignoring skilled domestic workers in hopes of attracting cheap foreign labor. For evidence, they could point to recent college graduates, which studies have shown are unemployed or underemployed at a much greater rate than previous generations.