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Verizon buys AWS spectrum from cable cos to boost 4G LTE

updated 10:05 am EST, Fri December 2, 2011

Verizon grabs Comcast, TWC, Bright House spectrum

Verizon on Friday sought to claim an edge over AT&T by buying Advanced Wireless Spectrum (AWS) licenses from cable companies. The $3.6 billion purchase will see it get 122 licenses for the often 1,700MHz or 2,100MHz bands from SpectrumCo, a team-up between Bright House, Comcast, and Time Warner Cable. Each company gets a sum directly relevant to its stake, at $2.3 billion for Comcast, $1.1 billion for Time Warner Cable, and $189 million for Bright House.

The CEO for Verizon, Dan Mead, made clear that the acquisition was meant to bolster its LTE-based 4G network. It would lead to "even better" devices and networks by adding more capacity, he said, maintaining the claim that there was a "current spectrum shortage" and that it would give a lift to capacity before the FCC freed up more space on its own.

No schedule was given for the deal, which hinges on getting FCC approval and passing muster under the Hart-Scott-Rodino antitrust act.

Its acquisition is significant as it suggests Verizon is acting on plans to allow for world roaming. LTE in Canada and eventually in Europe is likely to be based on AWS bands and would need similar support from Verizon phones to roam. They currently run only on the 700MHz band, which is limited largely to the US.

In competing with AT&T, it would serve as a foil to AT&T's conditionally approved buyout of Qualcomm 700MHz licenses and might actually hurt, not help, AT&T's insistence that it needs to buy T-Mobile for spectrum. By consolidating spectrum and making a deal that only involves the spectrum, not taking over whole companies, Verizon could make AT&T's proposed T-Mobile takeover appear like an overreach where a joint venture would be more effective.

Since T-Mobile itself uses 1,700MHz and 2,100MHz bands for its HSPA+ network, however, AT&T may be deprived of an easy alternative and could argue that it needs T-Mobile now that cable companies aren't an option. The FCC might not be sympathetic if if sees that AT&T had a more pro-competition opportunity for spectrum but wasted it, however.



By Electronista Staff
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