DOJ Sets Conditions for Verizon AWS

Verizon Wireless said that there are now 64 companies that have expressed interest in buying its 700 MHz Lower A and B Block spectrum. Verizon plans to sell the spectrum once the FCC formally approves its $3.9 billion purchase of AWS spectrum from a group of cable companies.

Verizon disclosed the number of interested parties in a recent filing with the FCC.
Verizon Wireless’s related transactions with Leap Wireless and T-Mobile will enable each carrier to rationalize its spectrum holdings and to serve customers more effectively. In addition, the Verizon Wireless – T-Mobile transaction represents a significant net transfer of spectrum to T-Mobile and therefore addresses spectrum aggregation concerns raised in the record.

On Thursday, the Department of Justice signaled that it will approve the AWS deal. The FCC still needs to approve the spectrum purchase as well as an AWS spectrum swap between Verizon and T-Mobile USA and a purchase of spectrum from Leap Wireless.

The proposed DOJ settlement requires:

  • Verizon retains the ability to sell bundles of services that include DSL, Verizon Wireless and the video services of a direct broadcast satellite company (i.e., DirecTV or Dish Network)
  • After five years, the cable companies are no longer barred from selling the wireless services of Verizon Wireless’s competitors, and may partner with other wireless providers.
  • The cable companies can elect to resell Verizon Wireless services using their own brand at any time as provided for under the amended agreements.
  • Upon dissolution of the technology joint venture, all members receive a non-exclusive license to all the joint venture’s technology, and each may then choose to sublicense to other competitors.

In May Verizon had noted that 36 companies were interested in its Lower A and B Block spectrum. U.S. Cellular has said it is interested and AT&T CEO Randall Stephenson said in June that his company would be interested in the B Block spectrum to complement its own holdings.

Verizon’s Lower A and B Block licenses have buildout requirements that mandate coverage to 35 percent of the licensed geographic areas by mid-2013, which could be one reason why Verizon has chosen to sell it now. However, those requirements also put pressure on any carrier that bids for the spectrum.

In addition to the 700 MHz sale, Verizon and T-Mobile agreed to a spectrum swap covering 218 markets. T-Mobile had been an opponent of the cable deal before the swap was announced. T-Mobile would gain spectrum covering 60 million POPs for their LTE-Advanced buildout next year. That will be added to the AWS spectrum it got from AT&T as a settlement for their failed merger with AT&T.

If both Verizon and T-Mobile offer LTE in the AWS band, presumably they would allow roaming. Currently there is no roaming between AT&T and Verizon LTE service on the 700 MHz band.

Related Dailywireless articles include; Verizon Getting AWS Spectrum Says WSJ, T-Mobile Okayed to Test Spectrum Sharing, 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

Posted by Sam Churchill on .

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