Here’s Why Verizon and AT&T are Butting Heads

AT&T (NYSE:T) is fighting for wireless spectrum territory in an effort to catch up with Verizon (NYSE:VZ), America’s largest wireless network provider. At the end of August, the Federal Communications Commission (FCC) approved Verizon’s $3.9 billion purchase of airwave rights from four major cable companies. This comes after AT&T fell behind in the spectrum war in 2006 when they were focusing on a blocked acquisition of T-Mobile. The FCC is reviewing $2.6 billion in deals from AT&T to acquire spectrum holdings.

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If the deal passes, AT&T’s already stellar wireless unit may constitute a duopoly in the United States alongside Verizon, claiming almost 60 percent of all customers. T-Mobile, Sprint (NYSE:S), and other smaller carriers are calling into question the the fairness of the current FCC screening process.

While Verizon has done well gobbling up airwaves and aggressively pushing its 4G network, it has also benefited greatly from its cable and FIOS services. Although a newbie in the field, Google (NASDAQ:GOOG) has entered the fiber optics game, and could be going on the offensive. If Google Fiber digs in its heels and takes off, the combined competition from Google and AT&T may put enough pressure on Verizon to challenge its #1 spot.

Shares of AT&T (NYSE:T) closed Friday down 14 cents at $37.30.

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