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Sirius XM customers in a few big cities have been complaining about losing their satellite radio signal and the company says it has found the culprit: interfering T-Mobile cellphone towers.

T-Mobile US Inc. says it isn't doing anything wrong. Instead, it blames Sirius XM's radios for the problem. Now Sirius XM Holdings Inc. has escalated the dispute to federal regulators, asking them to intervene.

The fight comes as the airwaves used for transmissions are getting more crowded with new services. T-Mobile has about 46 million retail wireless customers, while Sirius XM has about 28 million subscribers.

Sirius first detected a problem last year after customers in New York City reported their radios suddenly went silent during portions of their morning commute. Sirius conducted drive tests and concluded T-Mobile's cellphone transmitters were interrupting its service.

Sirius says the disturbance is "alarmingly severe, extensive and frequent" and is happening in several large urban markets.

Sirius XM spokesman Patrick Reilly claims the U.S. Federal Communications Commission's rules "place responsibility on T-Mobile to remedy interference caused by its transmissions and to cooperate with us to resolve the problem." Sirius XM remains open to working with the carrier "to keep the interference from spreading," he said.

T-Mobile, which has been upgrading its network, argues the interference isn't its responsibility because it happens inside Sirius XM radios. Those receivers should be engineered to block such anomalies and, therefore, the cost of any fix isn't T-Mobile's responsibility.

"T-Mobile is operating within the FCC's rules and it's clear from testing there's a problem caused by inadequate filtering in Sirius XM's receivers," said Steve Sharkey, T-Mobile's senior director of engineering and technology policy. He said the carrier will work with Sirius XM to "identify ways they can fix their problem."

A senior FCC official said the agency is trying to understand the cause of the problem because all the of the involved airwaves have been in use for years. The official said it still too early in the process to assign blame or responsibility.

The conflict between Sirius and T-Mobile derives from a quirk of physics, caused by something known by radio engineers as intermodulation. This happens when two airwave frequencies combine to create a third, similar to ocean waves coming together and making a new distinct wave. In this case, two airwave frequencies used by T-Mobile have produced a new frequency inside Sirius radios that is disrupting service.

Both parties agree on the physics but they disagree on the fix.

Sirius claims the problem arose with T-Mobile's increased use of its next-generation mobile service on a slice of airwaves referred to as AWS-1. The disruption happens close to T-Mobile cell sites, Sirius says in regulatory filings. The company is concerned the problem will worsen as T-Mobile continues adding towers to its network and smartphone users fill those airwaves.

Barring network alterations, Sirius wants T-Mobile to share in the cost of the problem's fix, which may include adding ground-based transmitters for the Sirius XM service to drown out the interference.

T-Mobile says its network is running over licensed frequencies in a manner consistent with regulations and is behaving no differently than other wireless carriers. T-Mobile says it doesn't plan to change its service and says it isn't responsible to shoulder the cost of Sirius' new equipment.

At this point Sirius and T-Mobile appear far apart. Sirius highlighted the issue with the FCC in August by objecting to a seemingly unrelated matter—a small airwave exchange between T-Mobile and Verizon Communications Inc. Both wireless carriers have said the dispute is unconnected to the transaction and should be dismissed.

Last week, Sirius XM's chief engineer, Terry Smith, emailed T-Mobile's Mr. Sharkey, copying in FCC officials, with the claim that T-Mobile was threatening to not discuss the interference issue unless the license objection was dropped.

T-Mobile's lawyers responded with a filing, warning "against communications with opposing counsel without your own legal representative present."

Write to Thomas Gryta at thomas.gryta@wsj.com

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(END) Dow Jones Newswires

September 30, 2015 20:55 ET (00:55 GMT)

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