Verizon's cable deal transforms AWS into a crucial LTE band

Verizon Wireless' (NYSE:VZ) pending acquisition of AWS licenses from four cable companies will propel that spectrum to new heights in terms of industry importance, making it an essential LTE band for global roaming support, according to an industry analyst.

Approval of the Verizon-cable deal elevates the 1700/2100 MHz AWS spectrum to higher status as a co-essential LTE band, along with the 700 MHz band, in the United States, Ron Westfall, research director of service provider infrastructure at Current Analysis, told FierceBroadbandWireless.

Multichannel News and other outlets reported Verizon's planned $3.9 billion purchase of nationwide AWS spectrum from cable operators Comcast, Time Warner Cable, Cox Communications and Bright House Networks already has the necessary votes to pass FCC muster. FCC Commissioners Robert McDowell and Ajit Pai--both Republicans--reportedly already submitted their votes concurring with parts of the deal, which, when combined with Chairman Julius Genachowski's approval on all counts, would seal the deal. The U.S. Department of Justice gave its approval for the transaction, with added conditions, on Aug. 16.

"Verizon has used only 700 MHz spectrum for its LTE deployments thus far," Westfall said, noting Verizon has seven regional 700 MHz C Block licenses, "its so-called beachfront spectrum that anchor its nationwide LTE deployments to date." Verizon expects to auction off its 52 B Block licenses and 24 A Block licenses as part of its overall deal with DOJ and FCC to gain regulatory approval to reconfigure its overall spectrum holdings with untapped AWS spectrum.

Not only does Verizon's deal with the cable companies bring it new AWS spectrum, it also paves the way for T-Mobile to acquire significant AWS spectrum holdings from Verizon in a separate transaction. "As a result, Verizon and T-Mobile can soon apply 152 AWS licenses toward nationwide build-out and support of LTE services, providing more incentive and confidence for silicon, device and infrastructure suppliers to invest more aggressively in AWS support on LTE equipment," said a new Current Analysis report, which Westfall coauthored.

Essentially the Verizon-cable deal has the side benefit of expanding the overall AWS ecosystem, said Westfall, which will aid two of its main rivals that have AWS investments. AT&T (NYSE:T) has mixed its LTE deployments across 700 MHz and AWS spectrum and T-Mobile has only AWS spectrum for its LTE rollout, which will commence next year. Sprint Nextel (NYSE:S) is currently rolling out LTE on 1900 MHz G-Band spectrum.

Further, upcoming AWS auctions are designated in Latin American countries such as Colombia, Uruguay, Mexico, Argentina, and Peru, complementing current AWS support in the United States, Canada and Chile. Consequently, AWS has become "an essential LTE band for LTE roaming support in North America and Latin America, advancing AWS as a solid candidate for one of the essential seven or eight LTE bands deemed critical for global roaming LTE devices and services," said the Current Analysis report.

Though the report contends that a delay by the U.S. government in allocating the 1755-1780 MHz AWS band to mobile broadband could stall the full potential of AWS spectrum, it also suggests the Verizon-cable deal "can give U.S. operators increased bargaining and lobbying leverage to incentivize government agencies, such as the Department of Defense (DOD), to take tangible steps to re-allocate their 1755-1780 MHz frequency holdings of AWS spectrum toward commercial mobile broadband use."

Another new report from Current Analysis addresses the potential for spectrum sharing, which the government has proposed for the 1755-1780 MHz band, among others. The FCC recently granted T-Mobile permission to test spectrum sharing in that band.

"T-Mobile USA's test of spectrum sharing in the 1755 MHz band will serve as a critical step in understanding what extent spectrum sharing will be a viable option to help solve the nation's spectrum shortages," said Lynnette Luna, senior analyst, mobile ecosystem for Current Analysis. "It will be important for infrastructure suppliers, device vendors and competing operators to participate to gain early insight into spectrum sharing."

For more:
- see this Multichannel News article
- see this Current Analysis release

Related news:
Verizon: 64 companies interested in our 700 MHz spectrum
Verizon's cable partners could launch hybrid Wi-Fi/cellular service
Verizon's $3.9B cable deal speeds toward FCC, DOJ approval
Verizon closer to wrapping LTE blitz as it hits 75% coverage
T-Mobile defends Verizon spectrum swap as way to enhance LTE network

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