Spectrum Sales Wont Go Forward Without AWS Purchases

 

Junker noted that if the AWS purchase doesn't go through, then the sale of the 700MHz spectrum will be off. "The sale of the A and B licenses will benefit other carriers if we get the AWS," Junker said. "If not, we'll hang on to A and B."

While Verizon Wireless is trying to spin the spectrum sale so that it appears altruistic, the reality is that the FCC would unlikely grant the sale of the AWS spectrum without some sort of giveback. The arrangement to sell to other carriers will make the FCC happy as much as it will the other carriers.

However, the proposed 700MHz sale is meeting with some opposition. The Rural Cellular Association is saying that the sale is insufficient to resolve competitive concerns in the industry.

"In light of this announcement, the FCC should be more focused than ever on ensuring an interoperability requirement in the Lower 700MHz spectrum," said the association's President and CEO Steven K. Berry. "Further, Verizon's announcement increases RCA's concerns with the pending cable transactions, including access to usable, LTE-ready spectrum and access to commercially reasonable roaming and backhaul arrangements."

Berry urged the FCC to examine the proposed deal carefully.

Public interest group Public Knowledge also expressed doubts. "There is less than meets the eye to Verizon's spectrum sale," said Harold Feld, legal director for Public Knowledge "At the end of the day, Verizon and the cable companies will still have created a cartel in which Verizon will rule the air for wireless broadband, and cable will offer the only widespread true high-speed landline Internet services."

Feld asserted that whenever Verizon Wireless and AT&T have spectrum sales, all they actually do is sell to each other. He said the sale would only widen the gap between the largest companies and everyone else.

However, the wireless spectrum landscape has changed since Public Knowledge first raised the issue in 2011. Since that time, AT&T had to cede spectrum to T-Mobile, giving that carrier enough resources to also offer LTE, albeit on a more limited basis than the carrier would like. Meanwhile, Sprint has begun refarming its Nextel frequencies so that in conjunction with Clearwire it can offer LTE. In fact, Sprint together with Clearwire rivals the larger two carriers in terms of the amount of spectrum available for LTE.

Verizon Wireless says this sale is really all about making spectrum available to other wireless companies. "It's more about availability than raising cash," Junker said. He did say that Verizon Wireless hopes to make back the money the company spent to buy the spectrum in the first place, but what really matters is that Verizon Wireless meets its spectrum rationalization goals. "What's important to us is to have adequate spectrum," he said, "which is upper 700 and AWS."