Verizon’s Spectrum Deal: Tough Nut

Posted by Sam Churchill on

Verizon Wireless may need to agree to tough conditions to win approval to buy spectrum from cable companies, reports Reuters.

The Justice Department and FCC are reviewing plans by Verizon Wireless, the biggest U.S. mobile provider, to buy spectrum from a consortium of cable providers, including Comcast and Time Warner Cable for about $3.9 billion. The transactions were proposed in December.

While the Justice Department and FCC appear prepared to approve the spectrum portion of the deals with minor adjustments, antitrust regulators have sought strict limits on controversial side deals to market each other’s products, according to Reuters.

The anti-trust department is concerned that the two companies will divide up broadband territory, reducing competition.

In its filing (pdf), T-Mobile, the No. 4 cellphone carrier, told the FCC that Verizon’s spectrum acquisition would place an “excessive concentration” of wireless spectrum in Verizon’s hands. But T-Mobile changed its tune when T-Mobile was offered some of the AWS Spectrum from Verizon.

Meanwhile, AT&T bought 2.3 GHz from NextWave and has an agreement with satellite radio to use some 20 MHz in the 2.3 GHz (WCS) block to deploy LTE service to about 40 percent of the U.S. It would avoid using blocks “C” and “D”, that are near satellite radio frequencies. AT&T may have bought Nextwave Wireless spectrum largely to show their commitment to non-interference with satellite radio.

NextWave Wireless and AT&T had spectrum in the 2.3 GHz C and D blocks, but AT&T’s agreement with satellite radio would take the C and D blocks off the market to avoid possible interference. Analysts estimate that AT&T will have around 20 MHz of usable WCS spectrum for LTE service in many areas of the country, especially in the Midwest and West, but an average of 12 MHz nationwide.

AT&T’s move to acquire 2.3 GHz spectrum for LTE may make sense in that it is similar to the 2.3 GHz band used in China and India, although those countries will utilize TD-LTE.

The 2.3GHz Band 40 will be used for LTE TDD deployment in China and India, potentially covering literally billions of people. Global standardization and regulation has resulted in the near-global adoption of two unpaired bands for LTE TDD, namely Band 40 (2.3GHz) and Band 38 (2.6GHz). LTE TDD allows the deployment of networks just 10 MHz wide.

LTE Release 10 (LTE-Advanced) allows inexpensive relay stations to fill in coverage shadows and can self-backhaul without using a separate radio. Of the 300 operators who have TDD spectrum resources, 66% own 2.3GHz and 2.6GHz bands, according to ZTE.

AT&T says it may take 4 years to bring their 2.3 GHz spectrum on-line. AT&T’s timeline is not far from Dish’s estimate of when their 2.1 GHz band (MSS) spectrum will be ready to go. The fate of Dish’s 40 MHz of LTE spectrum is still up in the air.

AT&T and T-Mobile may be likeliest buyers (or partners) of Dish spectrum since both Verizon and Sprint currently have lots of unused spectrum (AWS and 2.6GHz, respectively).

Bottom line:

  • If Verizon gets its AWS spectrum, then it should have a total of 107 MHz
  • If AT&T gets 2.3 GHz, then it should also have a total around 107 MHz
  • If T-Mobile gets 40 Hz from Dish, then it should also have a total around 95 MHz
  • If Sprint buys 40 Hz from Clearwire, then it should also have a total around 92 MHz

Telecom regulators might favor that kind of free-market initiated spectrum distribution.

Related Dailywireless articles include; AT&T Buys 2.3 GHz from NextWave, AT&T Wants 2.3 GHz for LTE, FCC to Okay Verizon/Cable Spectrum Buy, T-Mobile Gets AWS Spectrum from Breakup, T-Mobile USA Encouraging 2G Phase Out, Verizon AWS Spectrum Purchase Opposed, Verizon Buying Nationwide AWS Spectrum from Cable, Verizon-Cable Deal: Too Cozy?, Cross Marketing of Verizon & Cable Begins, AT&T: On the Couch, DirecTV Partnering with Clearwire?, Aero Prevails

Posted by Sam Churchill on Friday, August 3rd, 2012 at 1:17 pm .

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