Verizon CFO 'Very, Very Confident' Cable, Spectrum Deals Will Pass

 
 
By Michelle Maisto  |  Posted 2012-05-17 Email Print this article Print
 
 
 
 
 
 
 

Verizon Wireless' CFO is confident that the carrier's deals with the cable companies will be approved and that in offering to sell some spectrum, the company is actually creating more competition.

Verizon Wireless CFO Fran Shammo said that he is €œvery, very confident€ that a pending spectrum deal with several cable companies will go through as planned. When it does, Shammo added, Verizon€™s concerns about spectrum€”a scarce and hotly pursued resource in the industry€”will be allayed for €œthe next several, several years."

Shammo shared his thoughts about Verizon€™s controversial deals with several cable companies during the J.P. Morgan Technology, Media and Telecom (TMT) conference May 16.

Verizon is in agreements to purchase spectrum from Cox Communications as well as from Time Warner, Comcast and Bright House Networks, collectively known as SpectrumCo. The deals have raised concern from various parties for a number of reasons. One is that it would give one carrier a considerable portion of the nation€™s spectrum. Another is that as part of the agreement, the cable companies and Verizon€”traditionally competitors€”will market and bundle one another's products.

Additionally, concern has also been raised regarding details that should have been made public but were omitted or left opaque. The Federal Communications Commission (FCC) was petitioned by parties that said the latter prevented them from being able to respond appropriately.

Speaking with JP Morgan analyst Phil Cusick, Shammo said the second round of requested documents had been submitted to the FCC, which has extended its 180-day €œclock€ by three weeks to give them time to review everything, and now Verizon is exactly where it thought it would be.

Shammo explained the difference between what Verizon is doing and AT&T€™s failed bid to purchase T-Mobile for its spectrum, according to a transcript from Thompson Reuters.

€œThis is a very different deal,€ said Shammo. This is the purchase of spectrum, not the purchase of a company and customers. So we are very, very confident.€

Verizon has also offered to sell off other types of spectrum, should its purchase of AWS spectrum be approved. Shammo suggested this isn€™t an effort to coax the FCC to approve the deal, but rather something closer to good sportsmanship on Verizon€™s part:

I know there is also some speculation that the FCC forced us to put the A and B spectrum up for sale. The FCC had no idea we were going to do that. We think it was the right thing to do. Look, I think if you look at spectrum overall, we are very happy with where the FCC has come out fairly aggressively to start to provision more spectrum for mobile services. Congress this past year passed the incentive auction for the broadcasting spectrum and the FCC looks like they are moving fairly aggressively to bring that into the wireless industry, which we are fully supportive of.

But the other thing that we think the industry needs is a secondary market. And the reason we put the A and B up is because if I can get the AWS approved, which we think we will, the A and B that we have can be utilized by other carriers much more efficiently than it can be used by me. And quite honestly, I think we have been very good stewards of our spectrum. I think we have shown a history there and we don't want to be looked at as hoarding spectrum for the industry. So it is the right thing to do for us and for the rest of the industry.

T-Mobile has been among the critics of the deal and is particularly outspoken about what it says are the inefficiencies of the Verizon network. A group calling itself the Alliance for Broadband Competition held a kick-off call with the media May 14, during which its members€”which include Sprint, T-Mobile, RCA-The Competitive Carriers Association and the Rural Telecommunications Group€”detailed their concerns.

T-Mobile, in a written statement, explained that its opposition to the deal €œcomes down to this€”it€™s against the public interest.€

It continued:

It will result in excessive concentration of this especially important spectrum for LTE [Long-Term Evolution] in the hands of the nation€™s largest wireless carriers, who have been sitting on spectrum in this band for years without making the slightest effort to put it to use. The end result will be to foreclose competition and harm consumers. Additionally, Verizon€™s simplistic claim of being the most efficient user of spectrum falls apart upon closer examination of the facts€”as outlined in T-Mobile€™s filings at the FCC, when properly measured, Verizon is the least efficient user of spectrum among the nationwide wireless carriers.


 
 
 
 
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
 
 
 
 
 
 
 

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