FCC Approves Verizon’s $39B Spectrum Deal

Posted by Sam Churchill on

The Federal Communications Commission today officially and formally granted Verizon Wireless permission to purchase 122 AWS spectrum licenses (pdf) from a consortium of cable companies, as well as other transactions with T-Mobile USA and Leap Wireless. Verizon plans to use the spectrum to enhance its LTE 4G network.

The $39 billion deal has already won approval from the Department of Justice. The FCC gave the green light, but like most cell phone contracts, some conditions and provisions apply.

  • Verizon Wireless must close its proposed spectrum transfer with T-Mobile USA within 45 days of its closing of the SpectrumCo, Cox, and Leap transactions.
  • Verizon will have to provide service to 30% of the areas covered by its new AWS spectrum holdings within three years of completing the transaction, and 70% of the new areas within seven years.
  • Verizon Wireless has to agree to offer roaming agreements “for commercial mobile data services on any of its spectrum in the areas where it is acquiring AWS-1 spectrum to other commercial mobile data service providers on commercially reasonable terms and conditions.”
  • Verizon has to offer these roaming terms for five years.

Verizon and T-Mobile have also 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. That spectrum transfer provided T-Mobile with a large package of valuable AWS mobile spectrum in 128 Cellular Market Areas (CMAs), including 12 of the top 20 markets.

The FCC also gave the okay to transfer spectrum to Leap Wireless. Under that deal, Leap Wireless will acquire 12 Mhz of 700 Mhz A-block spectrum from Verizon in Chicago for $204 million. In exchange, Verizon will acquire excess spectrum in various markets around the U.S. for $188 million. Verizon’s Chicago licenses cover 11 million residents, but Verizon’s own LTE coverage in Chicago uses a different area of that 700MHz block.

In exchange, Leap will sell Verizon 23 PCS licenses and 13 AWS-1 licenses covering covering about 18.7 million residents in locations across the country.

The AWS band uses frequencies from 1710 to 1755 MHz for uplink, and from 2110 to 2155 MHz for downlink. Coverage is similar to the PCS band (1.9 GHz), used by most of today’s mobile carriers. The unpaired section of the AWS band goes from 2150 to 2162 MHz. It was once promoted by M2Z for free, nationwide broadband, subsidized with advertising revenue.

The deal makes T-Mobile and Verizon the dominant providers of mobile services in the AWS band. If both Verizon and T-Mobile offer LTE in that 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; DOJ Sets Conditions for Verizon AWS, 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 Thursday, August 23rd, 2012 at 12:43 pm .

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