ATandTs Bargain-Basement Spectrum Deal

 
 
By Wayne Rash  |  Posted 2012-08-04 Email Print this article Print
 
 
 
 
 
 
 


AT&T bought NextWave at the bargain-basement price of $25 million, plus a contingent payment of about $25 million plus cash and other assets to pay off NextWave€™s debt, for a total of $600 million. NextWave originally bought the WCS spectrum in 1997, but was involved in a protracted legal battle with the FCC after NextWave declared bankruptcy and defaulted on its payment for the spectrum. NextWave got the rights to the spectrum in 2004, but has been unable to use the spectrum because of the potential for interference with Sirius XM.

By working with Sirius XM, AT&T was able to work out an engineering agreement that satisfied Sirius XM, which led to the joint proposal between the two companies. However, the FCC is still considering the proposal, and once it€™s accepted by the agency, the deal may be subject to approval by the U.S. Department of Justice and the Federal Trade Commission. However, considering how long the government has been trying to wrest control of the WCS spectrum from NextWave, it€™s hard to see how the government is going to put up much of a fight.

AT&T has said that the company expects the FCC to take about three years to finalize the approval process. But considering that the FCC would clearly like to have some company besides NextWave handling the WCS band and considering that the adjacent spectrum holder and AT&T have proposed a joint solution, the only delay is likely to be the FCC€™s technical evaluation of the proposal. If the FCC staff is satisfied that it€™s workable, then there shouldn€™t be any roadblocks.

It€™s also unlikely that the DOJ or the FTC will stand in the way of the deal. NextWave is struggling to stay afloat and will never be in a position to use the WCS band for any sort of wireless. Because NextWave has no wireless customers, AT&T can€™t be seen as gaining unfair market share. In short, it€™s a deal that makes good sense and puts good spectrum to work.

By handing the spectrum planning in the way that it did, AT&T has demonstrated that it can do what another company planning to offer LTE on a frequency adjacent to satellite operations should have done. Had LightSquared tackled the engineering problems first, and acknowledged that the GPS operators needed to be protected, that company might be operating today. But it didn€™t and it€™s not. The AT&T proposal, by contrast, looks like it will sail right through the process.



 
 
 
 
Wayne Rash Wayne Rash is a Senior Analyst for eWEEK Labs and runs the magazine's Washington Bureau. Prior to joining eWEEK as a Senior Writer on wireless technology, he was a Senior Contributing Editor and previously a Senior Analyst in the InfoWorld Test Center. He was also a reviewer for Federal Computer Week and Information Security Magazine. Previously, he ran the reviews and events departments at CMP's InternetWeek.

He is a retired naval officer, a former principal at American Management Systems and a long-time columnist for Byte Magazine. He is a regular contributor to Plane & Pilot Magazine and The Washington Post.
 
 
 
 
 
 
 

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