Verizon Sells 700MHz Spectrum to AT&T, Honors Unlimited Snafu

Verizon Wireless has completed a $1.9 billion-plus spectrum deal with AT&T. Separately, it said it will honor unlimited deals offered during a glitch.

Verizon Wireless no longer offers unlimited plans, and customers still enjoying unlimited service have to give it up when they upgrade their devices. But not so this weekend, when a software bug allowed some customers with unlimited service to upgrade their devices and carry on with the data-rich offer.

Verizon released a statement Sept. 30 saying to those who benefitted from the glitch: Enjoy.

"A number of customers who were upgrading devices were able to maintain an unlimited monthly data feature while paying a subsidized price," said the statement. "Verizon Wireless will honor those orders that were approved this past weekend, allowing those customers to retain their unlimited plans for the duration of their contract and receive their new device."

The software issue was resolved Sept. 30, it noted, further adding for good measure, "The company no longer offers unlimited data plans and customers who want to retain existing unlimited data plans must pay full retail price for a replacement phone."

During the summer of 2012, both Verizon Wireless and AT&T introduced shared-data plans—plans that put the focus on an allotment of data, rather than on a single device—and began moving away from unlimited. Currently, Sprint is the only tier-one carrier to offer unlimited, high-speed data. However, its recent offer to lock in unlimited data for life suggests Sprint may also be planning to move on to a more lucrative business model.

Verizon Completes Spectrum Purchase

Verizon also announced Sept. 30 that it had completed a spectrum deal with AT&T.

Verizon sold 39 lower-700MHz B Block spectrum licenses to AT&T for $1.9 billion, plus some AWS-1 spectrum licenses.

The AWS licenses that Verizon picked up will enable it to increase the capacity of its 4G Long Term Evolution (LTE) network in several Western markets, including Los Angeles, Phoenix, Fresno and Portland.

Verizon said the transaction was announced in May 2012 and approved by the Federal Communications Commission (FCC) Sept. 3.

"Eight companies, including AT&T, signed license purchase agreements as part of the sale process; the other seven consist of six small or regional telecom carriers and one minority-owned firm," Verizon said in a statement. "To date, all agreements have closed, except for an agreement to sell licenses to Grain Management, a private equity firm that invests in the telecommunications sector, which remains pending."

Verizon added, though, that is has begun leasing from Grain Management an Advanced Wireless Services (AWS) license covering Dallas, which Grain acquired from AT&T.

The nation's wireless carriers are looking forward to FCC-held spectrum auctions in 2014, though the rules for the auction have yet to be settled.

T-Mobile has proposed setting limits on the amount of below-1GHz spectrum (such as the 700MHz spectrum in the above deal) that any one carrier can acquire during the auction. The sub-1GHz spectrum can penetrate buildings and so is particularly prized by the carriers.

Verizon and AT&T are against the limits, saying it would largely exclude them from the auctions. But in a Sept. 26 letter to the FCC, T-Mobile outlined why such "suggestions are not accurate."

Among other acquisitions, AT&T and Verizon could acquire "substantial spectrum in the top ten markets," said T-Mobile. The sole exception, it added, is that AT&T would be unable to acquire new spectrum in Dallas, where it already has 80 sub-1GHz holdings, or one-third of the spectrum holdings in Dallas.

The T-Mobile letter added that Verizon and AT&T have also tried to argue that spectrum above 1GHz is a "reasonable substitute" for sub-1GHz spectrum. In which case, T-Mobile's proposed sub-1GHz limits, said the letter, "should be entirely unproblematic for Verizon and AT&T because the dominant companies could simply acquire high-frequency spectrum to avoid the effects of any below-1GHz limit."