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The Federal Communications Commission sided with T-Mobile US Inc. in a dispute raised by satellite-radio operator Sirius XM Holdings Inc. over interference issues in its radios.

Sirius had attempted to block a relatively small exchange of licenses between T-Mobile and Verizon Communications Inc,, claiming that some T-Mobile cell sites disrupt its satellite signals. Sirius said that providing more licenses to T-Mobile would exacerbate the problem. T-Mobile says it isn't doing anything wrong and blames Sirius radios for the problem.

The agency approved the swap Thursday and essentially agreed with T-Mobile's contention that the interference complaint shouldn't be considered in the review of the license exchange.

The FCC said Sirius hadn't shown that it would be harmed by the transaction and didn't propose a deal-specific solution. It said Sirius could open a separate proceeding about the alleged interference and the deal approval isn't related to any potential ruling on the issue.

"The interference allegations upon which Sirius relies would be better addressed in a different proceeding," wrote Roger Sherman, head of the FCC's Wireless Telecommunications Bureau.

Sirius XM spokesman Patrick Reilly said the company is "working constructively" with T-Mobile to fix the issue but can pursue "other avenues" if the companies can't come to a resolution. A T-mobile spokesman declined to comment.

Sirius XM had complained that customers in a few big cities have been losing their satellite radio signal and that T-Mobile cellphone towers were the culprit. It 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.

T-Mobile says it is using its licensed frequencies in a manner consistent with regulations and other wireless carriers. The carrier, 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.

The problem apparently comes from something known to radio engineers as intermodulation. In this case, two airwave frequencies used by T-Mobile have produced a new frequency inside Sirius radios that is disrupting service.

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

(END) Dow Jones Newswires

December 10, 2015 19:25 ET (00:25 GMT)

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