The FCC is ready to approve Verizon Wireless’s proposed acquisition of 122 AWS spectrum licenses from a consortium of cable companies for $3.9 Billion, according to Reuters.
The regulator is reportedly set to green light the deal, which will grow Verizon’s 1.7/2.1 AWS spectrum significantly for its 4G LTE network. Verizon has yet to win approval from the Department of Justice, however, which is still weary of the marketing agreements between Verizon and cable companies, believing it could lead to less competition.
“The Justice Department has big concerns about what mischief could be done in undefined agreements that would lock out competitors,” said Reuters’ unnamed source. Verizon is prepared to divest some of its spectrum holdings if the government approves the deal. The Department of Justice has not indicated if or when it might approve the AWS spectrum sale to Verizon.
In the FCC’s 2006 AWS auction, SpectrumCo, the Cable group, paid $2.4 billion for 137 licenses in cities including New York, Boston, Washington, Detroit and Atlanta. Under their proposed deal with Verizon, cable operators would transfer that spectrum to Verizon Wireless for $3.6 billion. In addition, cable operators would resell Verizon’s mobile service. The FCC is taking a close look at the deal.
T-Mobile USA announced last month an agreement with Verizon Wireless for the purchase of Verizon AWS spectrum in 218 markets across the U.S. The transaction would improve T-Mobile’s spectrum position in 15 of the top 25 markets in the U.S. Previously, T-Mobile opposed the Verizon AWS deal, with cable operators.
Some of the spectrum T-Mobile is acquiring include licenses that Verizon is acquiring from the cable operators. Verizon’s swap of AWS spectrum with T-Mobile gives both sides more contiguous spectrum within the AWS-1 band. T-Mobile will gain spectrum mostly in the East, covering 60 million POPs–notably in Philadelphia; Washington, D.C.; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; North Carolina; Memphis, Tenn.; and Rochester, N.Y. Verizon would give up 10 MHz of spectrum in markets where it has 40 MHz of AWS. Verizon would get AWS spectrum from T-Mobile in some markets.
Sprint is rolling out its LTE service on July 15. Sprint will use FD-LTE, 5 MHz x 5 MHz on the 1900 MHz band (PCS G-block). So far, Verizon and AT&T are using 700 MHz spectrum in 10 MHz x 10 MHz slots, which should give them a speed advantage in most markets. T-Mobile isn’t expected to roll out their FD-LTE network in the AWS band until 2013 at the earliest, maybe about the time Verizon rolls out their AWS LTE service.
The $3.6 billion Verizon/Cable deal values the spectrum purchased at $0.69 per MHz-POP (the number of people covered by each megahertz). That’s a big jump from the $0.45 per MHz-POP that cable operators paid in 2006.
Verizon got wall-to-wall coverage across the United States by buying the entire 700 MHz “C block”, then bid up the price on the “B block” so AT&T had to pay through the nose. AT&T has nothing for future expansion except some tentative 2.3 GHz. They’ll have to pay a princely sum for Dish (and build a network) or be an MVNO on Clear.
Dish has met with FCC officials to accelerate its utilization of their 2.1 GHz spectrum which 3GPP has adopted as Band 23. Dish Network said that it will not be able to launch its proposed LTE Advanced network until 2016, or later, using their 40 MHz of S-Band spectrum. Dish said it needs 48 months after the LTE Advanced specifications are finalized to obtain network infrastructure equipment, chipsets and devices.
Related Dailywireless articles include; FCC Wants More Data on AWS Verizon Buy, T-Mobile Gets AWS Spectrum from Breakup, Verizon Buying Nationwide AWS Spectrum from Cable, 300 MHz Expected from Refarming and TV Spectrum, AT&T Wants 2.3 GHz for LTE and T-Mobile USA Upgrades to LTE, T-Mobile and MetroPCS Petition FCC for Dish Spectrum, Cable MSO’s Create “CableWiFi” Network, Time Warner Cable Beams Muni WiFi, AT&T: Free WiFi (with Video Ads) and Carrier WiFi Moves Ahead