Verizon Wireless (NYSE:VZ) said that there are now 64 companies that have expressed interest in buying its 700 MHz Lower A and B Block spectrum. Verizon plans to sell the spectrum once the FCC formally approves its $3.9 billion purchase of AWS spectrum from a group of cable companies.
Verizon disclosed the number of interested parties in a recent filing with the FCC. On Thursday, the Department of Justice signaled that it will approve the AWS deal--and its attendant commercial agreements--now that Verizon and the cable companies have agreed to changes to their commercial deals. The FCC still needs to approve the spectrum purchase as well as an AWS spectrum swap between Verizon and T-Mobile USA and a purchase of spectrum from Leap Wireless (NASDAQ:LEAP).
In May Verizon had noted that 36 companies were interested in its Lower A and B Block spectrum. U.S. Cellular has said it is interested and AT&T (NYSE:T) CEO Randall Stephenson said in June that his company would be interested in the B Block spectrum to complement its own holdings.
"As previously announced, the sale of the A and B Block spectrum licenses is contingent on the approval of our acquisition of spectrum from the cable companies," Verizon spokeswoman Robin Nicol told FierceWireless last week after the DoJ had announced its intention to support the deal. "If the FCC approves the acquisition, we will keep moving forward with the sale process for the A and B Block spectrum. We have not set a date yet for taking bids, but expect to do that soon. Verizon Wireless remains committed to putting unused spectrum in the hands of companies that can use it for the benefit of their customers."
Via public filings with the FCC, the nation's largest carrier has matter-of-factly stated what has been a general consensus among analysts since the proposed 700 MHz sale was announced in May: that AWS spectrum is better spectrum and is more complementary to Verizon's existing spectrum holdings. Verizon noted the technical challenges associated with making its devices work for both the Lower 700 MHz spectrum and the Upper C Block, which it is currently using to deploy LTE to around two-thirds of the U.S. population. Verizon also noted the interference concerns between the A Block and Channel 51 broadcast spectrum.
Verizon's Lower A and B Block licenses have buildout requirements that mandate coverage to 35 percent of the licensed geographic areas by mid-2013, which could be one reason why Verizon has chosen to sell it now. However, those requirements also put pressure on any carrier that bids for the spectrum.
In December, Verizon agreed to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. Separately, Verizon said it will buy Cox Communication's 20 MHz of AWS spectrum covering 28 million POPs for $315 million. Those spectrum holdings are in addition to the AWS spectrum Verizon already owns. Verizon is using its 700 MHz Upper C Block spectrum for its LTE network, which currently covers 75 percent of the U.S. population.
In addition to the 700 MHz sale, Verizon and T-Mobile agreed to a spectrum swap covering 218 markets that both companies say will rationalize their AWS holding and help their LTE rollouts. T-Mobile had been a stanch opponent of the cable deal before the swap was announced. T-Mobile has said it will gain spectrum covering 60 million POPs and that this will lead to a more robust LTE buildout next year.
- see this FCC filing
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