News Analysis: Cox Communications decided after buying a bunch of spectrum that it wasn't going to be a wireless company after all. So it sold its spectrum holdings to Verizon for $315 million and set up a marketing deal.
the world of "could of, should of, would of" you have to ask yourself
what might have happened if events had played out in some other way. For
example, what might have happened if AT&T, finding itself low on spectrum,
had decided to buy some from companies that had it but didn't need it. For
example, suppose it had bought the spectrum holdings from Cox Communications.
Dec. 16, Verizon Wireless did just that. Cox has agreed to a $315 million deal
with Verizon that will transfer all of its
20MHz Advanced Wireless Services (AWS) spectrum licenses to Verizon. This
deal gives Verizon access to 28 million new customers, and it gives Cox and Verizon
the ability to sell each other's services. In other words, you'll be able to go
into a Cox Wireless store and buy a Verizon Wireless phone. You will also be
able to buy Cox services at a Verizon store.
now, that's about all that this agreement does, but out of it comes more access
to Verizon Wireless for its 4G customers, and Cox gets another outlet and
another stream of revenue. It's all pretty low-key. While the Media Access
Project is claiming that this is a cartel of some kind, that doesn't seem to be
the case. Cox had already dropped its efforts to become a wireless provider
long before the deal with Verizon, and my discussions with Cox executives
indicate that they're not expecting to take over Verizon's FiOS bundled
telephone, Internet and television service.
fact, Todd Smith, director of media relations for Cox, sees things much
differently. "Our 3G wireless venture with Sprint had a lack of wireless
scale, and we didn't have 4G," he said. But Smith added that there was
obviously a demand for wireless among Cox's customers and the company wanted a
way to accomplish that. The result is that each is selling the services of the
other. Currently, Cox isn't selling wholesale services for Verizon, however,
although that might happen in the future.
the deal has been signed, it won't take effect for a while. "The spectrum
deal has to go through the regulatory process," Smith said. "The
joint sales agreement is something we'll be working on over the next few
months." This means that the sale of the Cox spectrum has to be approved
by the Federal Communications Commission.
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.