Verizon Getting AWS Spectrum Says WSJ

Posted by Sam Churchill on

The WSJ reports that federal regulators are preparing to clear Verizon Wireless’s $3.9 billion deal to acquire AWS frequencies (1.7/2.1 GHz) from several cable companies, after the companies reached broad agreement to settle antitrust concerns.

The WSJ says the cable companies have agreed to limit the scope and duration of side agreements to sell each other’s services, the people said. Consumer groups and other critics had said the joint marketing pacts were effectively agreements between the companies not to compete for customers seeking broadband Internet, television and phone services in their homes.

The two sides sparred over whether that prohibition would extend to areas where Verizon offers phone and Internet service but not FiOS. Some critics of the deal said the joint marketing agreement might dissuade Verizon from rolling out FiOS in those areas, reducing options for people living there.

In the end, the companies appear to have prevailed on that point, in part because Verizon had already said it didn’t intend to extend the fiber-optic network that delivers FiOS service, according to the people familiar with the talks.

In June Verizon agreed to swap and sell some the AWS spectrum in 218 markets with rival T-Mobile USA. T-Mobile will gain spectrum covering 60 million people in exchange for cash, and spectrum said it will hand over to Verizon Wireless spectrum that covers about 22 million people. Analysts put the value of the spectrum T-Mobile is buying from Verizon at about $260 million, reports the Washington Post.

The $3.6 billion original Verizon/Cable deal valued 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.

Although some details are still being worked out, Justice Department and Federal Communications Commission officials are preparing to approve the deal in the coming weeks, people familiar with the matter said. FCC Chairman Julius Genachowski is expected to begin the process this week by circulating a proposal to approve the deal among the agency’s four other commissioners, according to several agency officials.

T-Mobile plans on using its 1700 MHz AWS spectrum for LTE while it refarms its 1900 MHz PCS spectrum for HSPA+ service. That also plays well for the iPhone, which supports LTE on the PCS band, but not (yet) on the AWS band. T-Mobile got AWS spectrum from AT&T after the failed merger, and is likely to add more AWS spectrum from Verizon, if (and when) Verizon’s purchase of AWS spectrum from cable operators goes through.

T-Mobile’s $4 billion 4G network evolution plan will expand voice and data coverage around the country and launch LTE service in 2013.

In the second quarter of 2012, T-Mobile USA announced an agreement with Verizon Wireless for the purchase and exchange of AWS spectrum licenses (subject to regulatory approval), to improve T-Mobile’s network coverage in 15 of the top 25 markets in the U.S.

It also completed the AT&T deal break-up AWS license transfers that will expand T-Mobile’s coverage in 12 of the top 20 U.S. markets; and announced a spectrum exchange agreement with Leap Wireless International, that will further 4G coverage in four states.

Currently, T-Mobile offers an HSPA+42 network covering 184 million POPs in 185 markets, and its HSPA+21 network covers around 220 million POPs. The breakup fee includes $3 billion in cash, as well as a seven-year UMTS roaming agreements that will allow T-Mobile to expand its coverage to 280 million POPs.

Related Dailywireless articles include; Verizon’s Spectrum Deal: Tough Nut, AT&T Buys 2.3 GHz from NextWave, AT&T Wants 2.3 GHz for LTE, FCC to Okay Verizon/Cable Spectrum Buy, 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

Posted by Sam Churchill on Tuesday, August 14th, 2012 at 7:32 am .

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