Is Verizon looking to offload LMDS spectrum holdings?

Verizon looks like it could be selling of the remainder of its LMDS millimeter wave licenses to fixed wireless service provider Etheric Networks.

Information from Etheric said the agreement involves 20 LMDS (Local Multipoint Distribution Service) band licenses, pending FCC approval. Markets include cities in California, New Mexico, Colorado, Utah, Arizona, Washington, and Oregon. It reflects a total of MHz/POP of 12,508,914,900. 

Etheric Networks’ CEO Alexander Hagen disclosed the news in a LinkedIn post last week, which has since been taken down. Hagen had said the purchase would support the company’s RDOF application and help provide operators in the Western U.S. with access to licensed multipoint spectrum. It would also make Etheric the largest holder of LMDS A/B licenses in the 29/31 GHz bands in California.

“Our goal is to get to 450 MHz of spectrum in every county we are deploying in RDOF,” Hagen stated in the post.

RELATED: Etheric Networks plans use of CBRS spectrum for fixed wireless access

Etheric is a fixed wireless internet service provider primarily serving the San Francisco Bay Area and would use the licensed LMDS spectrum to deliver gigabit service in its core market area. In addition, it would partner with local ISPs, and city, county, and Tribal governments to sublicense the mmWave spectrum. Etheric previously scooped up CBRS spectrum at the FCC’s auction for priority access licenses(PALs). The company secured licenses covering seven counties for $367,000.

No applications for transferring LMDS licenses had been filed with the FCC as of Monday afternoon.

Fierce reached out to Verizon for comment but had not heard back as of publication.

‘Complete exit’ from 29, 31 GHz

The potential sale to Etheric follows on a recent Verizon agreement with GeoLinks, which is acquiring 208 LMDS licenses for fixed wireless and backhaul for 5G services – but the moves don’t necessarily mean that the carrier is losing interest in mmWave spectrum.

Although LMDS bands are high frequencies, like mmWave used for Verizon’s 5G Ultra Wideband service, rules for LMDS don’t authorize mobile use; it can only be used for certain broadband including fixed services .  

According to data from spectrum analysis and research firm AllNet Insights & Analytics, after the GeoLinks sale, Verizon has 21 LMDS licenses remaining.

If the deal with Etheric happens, it would appear to represent “a complete exit of Verizon from the 29 GHz and 31 GHz spectrum opportunities,” AllNet President and founder Brian Goemmer told Fierce.

The map below provided by AllNet Insights represents Verizon’s LMDS holdings post-GeoLinks sale and looks to align with a spectrum map from Etheric Networks that was also posted by CEO Hagen, and then subsequently taken down.

AllNet Insights Verizon LMDS holdings
Verizon's LMDS holdings post-GeoLinks sale, with 21 licenses remaining. (AllNet Insights & Analytics)

 

As for a potential sale to Etheric to offload its remaining LMDS, he doesn’t think it signals a bigger push away from mmWave.

“This does not mean that Verizon has lost interest in millimeter wave spectrum,” Goemmer said.

As reported by LightReading, the GeoLinks transaction covered roughly 10% of all Verizon’s mmWave holdings – which Goemmer said was on a MHz per POP basis – but there is still a lot more in the tank.

“They absolutely still hold a lion’s share of millimeter wave spectrum that is licensed for mobility,” Goemmer said, pointing to 24 GHz, 28 GHz, as well as 37/39 GHz and 47 GHz.  “Those are all mobility and fixed, you could do either of those. But they [Verizon] have effectively sold out of the exclusively fixed spectrum that they held.”

RELATED: AT&T touts mmWave spectrum gains, but Verizon still has nearly 2X as much

And Verizon may not be selling spectrum that's as valuable compared to its other holdings.

“[LMDS] is less valuable than what Verizon paid for their millimeter wave spectrum,” Goemmer said, noting that was typically around $0.01 or $0.02 per MHz/POP.  “This pricing is probably less than that.”

And it’s nothing at all like C-band spectrum he said, where carriers collectively bid more than $81 billion (of which Verizon accounted for more than $45 billion) and per MHz/PoP prices went for dollars versus cents.

Why does Verizon have LMDS?

For those interested in a little bit of background, Verizon’s LMDS holdings go back to XO Communications and Nextlink.

In 1998, the FCC held an auction for LMDS spectrum licenses in 493 Basic Trading Areas (BTAs) with a total of 1,300 MHz of spectrum per BTA. That’s where XO, originally Nextlink, acquired LMDS licenses.

Verizon acquired XO Communications’ fiber optic network business in 2016, and eventually purchased spectrum that included LMDS bands.

There were two LMDS channels, A and B – the former was later broken up into different segments, some of which formed the new 28 GHz band where Verizon holds large amounts of mmWave spectrum.

New FCC rules granted flexible use to the 28 GHz band – meaning Verizon could use it for both mobile and fixed wireless. Those rules don’t apply to the remaining LMDS band, so it’s limited to certain kinds of service, including fixed wireless.