The FCC pressed Verizon Wireless (NYSE:VZ) for more details on its proposed sale of Lower 700 MHz A and B Block spectrum, which Verizon has said is contingent on the carrier getting regulatory approval to buy more attractive nationwide AWS spectrum from cable companies.
In a letter to John Scott, Verizon Wireless' general counsel, Rick Kaplan, the chief of the FCC's wireless bureau, asked pointed questions about why Verizon has now chosen to potentially give up the 700 MHz spectrum it spent billions of dollars on in 2008. In the letter, Kaplan noted that Verizon's Lower A and B Block spectrum covers around 175 million POPs, but that as of January 2012 Verizon had not deployed the spectrum (Verizon's existing LTE network, using 700 MHz Upper C Block spectrum, covers two-thirds of the U.S population).
Kaplan noted that 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. "What steps to date, if any, has Verizon Wireless taken to deploy mobile services using the Lower 700 MHz A of B block licenses (either or both)?" Kaplan asked. "On what timetable has Verizon Wireless been planning to deploy mobile service in these Lower 700 MHz blocks?" Kaplan also asked for Verizon's assessment of the challenges of deploying Lower 700 MHz A Block spectrum.
Additionally, Kaplan asked Verizon about the relevance of the sale of the Lower A and B Block spectrum to the FCC's review of Verizon's planned $3.9 billion purchase of AWS spectrum from cable companies. Kaplan also asked Verizon what steps it took to sell the Lower A and B Block spectrum before announcing its plans last month to do so, and if Verizon will abandon plans to sell the spectrum if the FCC does not approve Verizon's purchase of all of the AWS spectrum licenses.
Verizon declined to comment on the letter, according to multiple reports.
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. All of the deals include the option of Verizon reselling cable services and cable companies reselling Verizon service. The cable companies can also become MVNOs of Verizon.
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