Verizon acquiring a large slice of spectrum nationwide that's currently unused, or becoming available for re-use does not eliminate any competitors. It's as simple as that. I can buy the possibility that it does eliminate a possible place for T-Mobile to potentially expand it's own offerings if they don't win the auction, but you might be surprised how much a board of directors is willing to spend to avoid certain doom if they're unable to win something of such monumental importance. There may even be handicaps set by the FCC that could allow a lower bid by T-Mobile to win given adequate evidence that Verizon did not have an imminent need for it compared to T-Mobile. (Using T-Mobile for example here, you could easily substitute Sprint) Additionally, T-Mobile could react by acquiring spectrum available elsewhere to continue their expansion.
Don't get me wrong -- I'm definitely a free market guy and I like to see as little government interference as possible, period. That being said, this really needed to be done. I could make parallels to the healthcare legislation, which I feel was over-reaching, but at the risk of turning this into a political thread, I will not.