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Thursday, September 22, 2011, 04:46 pm PT (07:46 pm ET)

Verizon neutral but supportive of AT&T's T-Mobile acquisition

Verizon Wireless chief executive Lowell McAdam has described AT&Ts acquisition of T-Mobile as inevitable while warning that the government should not regulate without passing legislation and without addressing the underlying issue of limited carrier spectrum.

Speaking to an investor conference yesterday, McAdam said of the deal "that match had to occur," cautioning that if the government decides to block wireless mergers it must also also solve the problem of providing the wireless spectrum that carriers need to meet growing demand, according to report by the Wall Street Journal MarketWatch blog.

"We need to be very thoughtful on what the impacts would be to the overall industry if this is a way to regulate the industry without actually passing regulation," McAdam said.

In discussing the deal with US Federal Communications Commission chairman Julius Genachowski, McAdam said, "I have taken the position that the AT&T merger with T-Mobile was kind of like gravity. It had to occur, because you had a company with a T-Mobile that had the spectrum but didn't have the capital to build it out. AT&T needed the spectrum, they didn't have it in order to take care of their customers, and so that match had to occur."

A variety of 70 House Democrats and 100 Republican representatives have publicly urged support for the deal, although critics have charged that most of them had previously received campaign contributions from AT&T.

Republicans tend to favor the deal in support of limited interference by the government, while Democrats support the deal because AT&T has committed to billions in private investment to create jobs, in addition to the fact that AT&T is unionized, while T-Mobile's employees are not.

According to a report by TechCrunch, at least 11 states, Alabama, Arkansas, Georgia, Kentucky, Michigan, Mississippi, North Dakota, South Dakota, Utah, West Virginia and Wyoming, have also endorsed the deal, as they stand to benefit from the buildout of LTE networks AT&T plans to contract using T-Mobile's spectrum.

Seven other states, New York, California, Illinois, Massachusetts, Ohio, Pennsylvania and Washington, have supported the Department of Justice suit seeing to block or at least modify the terms of the deal to ensure competition.

Sprint, the third largest US carrier behind Verizon and AT&T, is vehemently opposed to the deal, but AT&T has pointed out that while Sprint has officially pleaded that the deal would limit the nation to just three large carriers, Sprint also floated the idea of buying T-Mobile itself.