Verizon Wireless today announced plans to sell off some of its coveted 700-MHz spectrum - provided its pending $3.6 billion purchase of spectrum from U.S. cable companies is approved by regulators.
"Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700-MHz licenses will be attractive to a wide range of buyers," Molly Feldman, vice president of Business Development for Verizon Wireless, said in a statement.
Back in 2008, Verizon spent $9.4 billion on 109 licenses in the 700-MHz band during an auction run by the Federal Communications Commisison, ending up with spectrum in the A, B, and C blocks. Verizon said today that it has used spectrum in the upper C block to deploy its 4G LTE network, and plans to use the cable-owned spectrum to continue that rollout.
As a result, Verizon is looking to sell the 700-MHz spectrum it purchased in the A and B blocks to the highest bidder. But without the cable spectrum, its plan is no good, so Verizon won't offer up its A and B spectrum unless the FCC and Department of Justice approve the cable deal.
In January, Verizon announced plans to purchase 122 Advanced Wireless Systems (AWS) spectrum licenses from SpectrumCo, LLC, a joint effort from Comcast, Time Warner Cable, and Bright House Networks. The companies also agreed to offer each others' services via quad-play packages, the first of which debuted recently between Time Warner and Verizon.
Rivals like T-Mobile and Sprint, as well as consumer groups, have argued that the cable spectrum purchase is "a clear threat to competition," and Verizon recently appeared on Capitol Hill to defend the deal.
Verizon said today that the FCC and DOJ analysis of the cable deal is "at varying stages of review," and should be complete by mid-summer. An FCC spokesman today declined to comment on the Verizon spectrum plan.
Verizon said it has hired Arkansas-based Stephens, Inc. to manage the sale process, more details of which will be revealed at a later date.
"Our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers," Feldman said.
Harold Feld, legal director of Public Knowledge - which has expressed concern about the cable deal - said today that "There is less than meets the eye to Verizon's spectrum sale."
"Verizon is trying to use the mere offer of a spectrum sale [to] tempt the FCC and the Justice Department into approving the deal with the cable companies, and the agencies should resist the temptation," Feld continued. "Recent history of such spectrum sell-offs shows that when Verizon and AT&T sell off spectrum, it's Verizon who buys AT&T's, and vice versa. Having AT&T buy Verizon spectrum in this instance would do nothing to change to help consumers."
During the 2008 auction, AT&T scored 227 licenses for a total of $6.6 billion. The carrier recently tried to acquire T-Mobile in a bid to boost its spectrum holdings, but the deal was rejected by the FCC and DOJ.
Last month, meanwhile, the National Telecommunications and Information Administration (NTIA) released a report that found approximately 95 MHz of "prime" spectrum in the 1755-1850 MHz band that could be repurposed - and shared - for wireless broadband use.
Earlier this year, members of Congress inserted language into a larger economic package that would allow the FCC to auction off broadcast spectrum to wireless carriers. The FCC subsequently announced it had secured the expertise of several auction theory and implementation experts, who will advise the commission during the process. It will be led by Auctionomics chairman and Stanford professor Paul Milgrom.
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