Antitrust Law Daily Wrap Up, ANTITRUST—C.D. Cal.: Wireless spectrum investor fails in second attempt to tune-in Sherman Act claims against T-Mobile, (Oct 21, 2026)

By Justin Marcus Smith, J.D.

The spectrum investor succeeded this time in pleading that T-Mobile is a monopsonist, but it failed to show antitrust harm in a context where wireless carriers must acquire a “critical mass” of 2.5 GHz licenses to offer geographic coverage.

Wireless spectrum investor WCO Spectrum, LLC (WCO) failed in its second attempt to state valid antitrust counterclaims against T-Mobile US, Inc. (T-Mobile), in an ongoing battle about 5G wireless spectrum, held the federal district court in Los Angeles. The court found, at the first step of its analysis, that WCO plausibly alleged this time that T-Mobile held monopsony power in the market for 2.5 GHz spectrum rights. The court said it did not need to consider WCO’s alleged direct evidence of monopsony power because WCO plausibly defined a relevant market; alleged T-Mobile had dominant market share; and described significant barriers to entry. However, WCO failed to allege antitrust harm because the alleged exclusivity provisions in T-Mobile leases, its acquisitions of licenses, and its litigation conduct each did not rise to anticompetitive conduct. The court again found no reason to doubt that T-Mobile had Noerr-Pennington immunity for its litigation conduct. The court granted T-Mobile’s new motion to dismiss the amended WCO counterclaims, but the court granted WCO leave to amend again. Amendment did not appear to be futile because, among other things, WCO said it had located 200 more T-Mobile leases which might be representative of T-Mobile’s leases as a whole (T Mobile US Inc. v. WCO Spectrum LLC, No. 2:23-cv-04347-AH-E (C.D. Cal. Oct. 19, 2026)).

Background. WCO formed in 2020 for the purpose of buying and leasing Educational Broadband Services (EBS) licenses as an investment. The FCC initially issued EBS licenses to educational institutions for educational broadcasting purposes, but in 2000, the FCC allowed license holders to lease their license rights to commercial businesses.

T-Mobile first sued WCO on June 2, 2023, alleging that WCO engaged in a scheme to defraud T-Mobile in connection with EBS licenses. The court denied a motion by WCO to dismiss, and WCO counterclaimed that “T-Mobile is a monopsonist in the market for 2.5 Ghz spectrum.” However, in October 2025, the court held WCO failed to state valid antitrust counterclaims. The court found WCO failed to state antitrust harms in connection with right-of-first-refusal (ROFR) and exclusivity terms in T-Mobile EBS lease agreements. The court also found the Noerr-Pennington doctrine barred claims of anticompetitive conduct related to T-Mobile lawsuits or threats of lawsuits against spectrum lessors.

WCO’s first amended counterclaims (FACC) were: (1) monopsonization under 15 U.S.C. § 2; (II) exclusionary agreements under 15 U.S.C. § 1; (III) agreements in violation of the California Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, et seq.; and (IV) intentional interference with prospective economic advantage under California law. WCO alleged that T-Mobile engages in three kinds of anticompetitive conduct: (1) entering into long-term leases with “exclusionary” provisions, including exclusivity, ROFR, right to participate, and confidentiality provisions; (2) pursuing and threatening “sham litigation” against license holders; and (3) acquiring hundreds of licenses for T-Mobile’s exclusive use. WCO said T-Mobile thereby excluded WCO from the market; reduced competition in the market for 2.5 GHz spectrum license rights; and foreclosed other 5G service providers from using the 2.5 GHz spectrum. WCO said T-Mobile’s conduct suppressed lease values for EBS license holders leading to lower quality service and higher prices for wireless consumers. Among other things, WCO alleged it made offers on 936 EBS licenses, but T-Mobile exercised its ROFR to acquire 69 of them and allegedly used anticompetitive tactics to block more than 800 other proposed sales.

In February 2026, T-Mobile again moved for Fed. R. Civ. P. 12(b)(6) dismissal for failure to state a claim. The court agreed to T-Mobile’s request to take judicial notice of the existence of the court documents, but not of their content. The court also recognized the FACC incorporated the T-Mobile lease agreements and the Albright and St. Lucie lawsuits by reference.

Relevant market. The court had previously found and ordered that the WCO definition of the relevant market, 2.5 GHz spectrum license rights, was not “facially unsustainable” and survived the pleading stage. The court again agreed with WCO, more specifically, that its alleged market definition did not impermissibly exclude other telecommunications carriers as potential buyers.

WCO maintained that the 2.5 GHz band was superior to and not interchangeable with other mid-spectrum bands, but T-Mobile argued the relevant market was underinclusive due to interchangeability and that new allegations in the FACC undermined the definition. For instance, T-Mobile pointed out how WCO newly alleged that its business model was to acquire a “critical mass” of 2.5 GHz licenses and make them available for lease or sale in aggregated blocks for wireless carriers to share spectrum.

The court upheld the WCO relevant market definition because the only rights EBS license holders can possess are for the 2.5 GHz band, and WCO plausibly alleged EBS license holders could not readily switch production to an interchangeable product. The court noted that WCO appeared to have evidence that T-Mobile, the dominant buyer, claimed its rights to the 2.5 GHz band were crucial. The allegation that other wireless carriers have turned to other mid-frequency bands for 5G might indicate some interchangeability, but the court also acknowledged that buyers switching to alternative products could be symptomatic of monopsony power. There was no fatal legal defect in the relevant market definition, and the court could not resolve the facts any further at the pleading stage.

Market power. The court found WCO plausibly alleged that T-Mobile controlled a dominant market share of the relevant market for 2.5 GHz spectrum rights. WCO alleged that T-Mobile exclusively controlled around 85% of 2.5 GHz spectrum or 78% of available 2.5 GHz licenses in the United States through direct ownership or long-term exclusive leases. T-Mobile did not dispute its market share. It argued instead that market should not be used to demonstrate market power because the alleged relevant market was improper, but the court upheld the relevant market definition.

The court found WCO also alleged facial barriers to entry. Inasmuch as WCO alleged T-Mobile controls most of the 2.5 GHz band, it was facially infeasible for existing buyers to buy licenses for the rest of the band because they would not, in aggregate, form a “critical mass” of geographic range for consumer use. Buyers facially had to wait for T-Mobile exclusive lease rights to expire. WCO did not rely exclusively on its allegation that T-Mobile had 85% of the market because it also alleged barriers to entry.

Antitrust injury. The court found WCO failed to plead antitrust injury. At bottom, WCO complained of being shut-out because (1) most T-Mobile EBS leases were exclusive long-term leases with a ROFR and other terms favoring T-Mobile as a buyer over other buyers, and (2) EBS license holders did not want to deal with anyone other than T-Mobile based on the lease terms and threats of litigation.

The court concluded the ROFRs merely allowed T-Mobile to match or bid higher than WCO. The court noted here how WCO alleged T-Mobile only exercised its ROFR “selectively” on 69 of 936 WCO offers even though T-Mobile had a ROFR on all of them. WCO did not provide examples of bid discouragement; provided only one example where the lease terms increased WCO’s own costs; and did not allege plausible market foreclosure. The court found WCO also did not explain how T-Mobile’s acquisition of licenses was anticompetitive. To the contrary, WCO alleged that Verizon and AT&T also leveraged their extensive spectrum holdings to capture significant market share because buying up a “critical mass” is essential to providing geographic coverage to consumers.

Noerr-Pennington. The court again found for T-Mobile that its litigation activity was immune under Noerr-Pennington and could not support WCO claims of anticompetitive conduct. WCO still failed to show how T-Mobile litigation conduct was objectively baseless. T-Mobile’s lawsuits alleged breaches of ROFR provisions, and as the court had already noted, the allegation that lessors abandoned their sales to WCO after T-Mobile sued suggested a chance that T-Mobile had valid claims.

Exclusive dealing. The court found the FACC lacked sufficient allegations to support an inference that exclusive leases between T-Mobile and EBS license holders foreclosed a substantial portion of the relevant market. The allegations were not enough to show that exclusive terms limited entrants from gaining a solid foothold. Despite WCO’s broad and conclusory allegations about the leases, its evidence suggested a lack of uniformity in their terms. WCO could not rely on the theory that the exclusivity clauses in the Albright College lease were widespread or that schools construed the terms to preclude third-party sales. WCO alleged it placed offers on some 936 EBS licenses, but aside from the 17 schools discussed previously, it did not contain information about how the schools generally responded to WCO offers.

State claims. The allegations about violation of California’s Cartwright Act were part of the WCO antitrust claims and involved T-Mobile’s litigation conduct which the court had found immune under Noerr-Pennington. The court dismissed the state law claims on the same grounds as the Sherman Act claims with leave to amend.

Amendment. The court ruled the FACC deficiencies were not entirely incurable. WCO also represented it could amend to describe over 200 more leases it located as representative of T-Mobile’s leases as a whole. On amendment, WCO must present a plausible basis to infer that exclusive dealing terms were representative of a substantial percentage of T-Mobile leases. While WCO did not need to allege an exact number or percent of exclusive leases, it would have to provide factual enhancement to connect non-uniform lease terms to WCO’s alleged exclusion from the market. For now, the court had to dismiss the WCO claims because they were not plausible.

The Case is No. 2:23-cv-04347-AH-E.

Judge: Hwang, A.

Attorneys: Jeffrey A. Rosenfeld (Alston and Bird LLP) for T Mobile US, Inc. Natasha J. Fernandez-Silber (Edelson PC) for WCO Spectrum LLC.

Companies: T Mobile US, Inc.; WCO Spectrum LLC

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