Verizon to gain 180 billion MHz-POPs of millimeter wave spectrum through XO transaction

Allnet's CMA Market Analysis Module details Verizon's spectrum holdings for each of the Top 20 CMA markets.

Verizon could gain an astounding 180 billion MHz-POPs via its pending transaction with XO Communcations, according to a new analysis of XO’s millimeter wave spectrum holdings by research company Allnet Insights & Analytics. The firm said Verizon stands to gain 158 billion of those MHz-POPs from XO’s LMDS A frequency band, 16 billion from the company’s LMDS B frequency band, and nearly 4 billion from the 39 GHz frequency band.

Further, Allnet’s research showed that Verizon’s millimeter wave spectrum holdings would be deepest in top markets including Chicago, Washington, D.C., Minneapolis-St. Paul and St. Louis. Those are markets where Verizon stands to gain more than 1,200 MHz of spectrum stretching across XO’s various millimeter wave spectrum bands.

Nationally, Allnet said Verizon stands to gain an average of “576 MHz of millimeter wave spectrum with 511 MHz of that being LMDS A spectrum, 53 MHz being LMDS B spectrum and 12 MHz being 39 GHz spectrum.”

The MHz-POP measurement is often used in the wireless industry to evaluate the value of spectrum and its geographic coverage. Such measurements rarely reach the “billion” mark because most wireless spectrum in use today in wireless networks sits at 1 GHz or below, whereas the millimeter wave spectrum owned by XO and others generally sits around 30 GHz or above.

Millimeter wave spectrum generally can be used to carry large amounts of data across relatively short distances, and has been fingered as a key element of forthcoming 5G network technologies.

Verizon in Febuary said it would acquire competitive provider XO Communications' fiber business for $1.8 billion. XO currently operates metro networks in 40 major U.S. markets, with over 4,000 on-net buildings and 1.2 million fiber miles. The service provider's intercity network also spans 20,000 route miles connecting 85 cities. As part of the transaction, Verizon will lease XO's LMDS spectrum with an option to buy it before the end of 2018. XO has 102 LMDS licenses in 28 GHz and 39GHz bands.

Verizon expects the deal to close sometime next year.

Not surprisingly, public interest groups, smaller wireless carriers and others are voicing a number of concerns about Verizon's acquisition of XO. Specifically, Public Knowledge, the Competitive Carriers association and others are urging the FCC to carefully evaluate the transaction and its possible effects on Verizon's competitors and the overall telecommunications marketplace.

"The two transactions would place Verizon, one of the two largest mobile phone carriers in the nation, in control of resources – specifically XO's fiber network and Nextlink's local multipoint distribution service (LMDS) and 39 GHz spectrum – that promise to play central roles in 5G applications and hence will be important to the companies competing against Verizon in the commercial mobile radio service (CMRS) 5G marketplace," Dish said in a recent filing with the FCC urging the agency to block Verizon’s acquisition of XO.

Verizon has said that XO's spectrum covers bands it can use to conduct 5G testing.

Interestingly, Verizon recently named longtime executive David Small as the new head of its Wireline Network Operations (WNO). Thus, Small will be charged with closing Verizon’s XO acquisition and merging the company into Verizon.

For more:
- see this Allnet post

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