Associations representing rural wireless carriers have so far reacted with a mixture of skepticism and cautious enthusiasm to Verizon Wireless' (NYSE:VZ) announcement that it is in discussions with a number of rural carriers to license them its 700 MHz LTE spectrum as part of an effort to build out the network.
Under the proposed deals, Verizon would license the spectrum to the local carriers for a small fee; the local carrier would then sell the service. Either Verizon or the other carrier would be responsible for the network equipment. Verizon is also looking to strike data roaming deals with the carriers. No deals have been announced so far.
"While the concept of such a close collaboration between small and large carriers sounds promising, the history of Verizon is such that there is little track record to suggest anything will come of this proposal," the Rural Telecommunications Group, which represents carriers with fewer than 100,000 subscribers, said in a statement.
"We'd be open to working with Verizon," Carrie Bennet, RTG's general counsel, told FierceWireless. "Our members are anxious to get LTE deployed in 700 [MHz]. I think Verizon knows it's sitting on a lot of spectrum in a lot of rural areas that isn't being utilized." Bennet said that none of RTG's 60 carrier members have been contacted by Verizon regarding the spectrum licensing proposal. Additionally, Bennet said RTG members would most likely want access to equipment and devices Verizon is using for its LTE network, as well as the ability to use Verizon's brand or enter into some kind co-branding partnership.
Steve Berry, president of the Rural Cellular Association, said several of RCA's members have been contacted by Verizon regarding spectrum licensing. However, he said he was caught off guard by Verizon's proposal, which was laid out by Verizon Wireless CEO Lowell McAdam in an interview earlier this week with the Wall Street Journal.
"I was a little surprised at the statement, because I have been in discussions with Verizon and other large carriers to try and find a common-sense, non-regulatory solution to data roaming, which would include 3G and 4G," he told FierceWireless. He said he is pleased Verizon is moving forward with a plan to bring 4G to rural America. RCA members consist of regional carriers with fewer than 10 million subscribers.
However, Berry said that because many RCA members have already purchased 700 MHz spectrum in the A and B Blocks, he was not sure why they should have to pay Verizon to get access to its C Block spectrum. Berry also said some RCA members have been approached by Harbinger Capital Partners, a private-equity firm that wants to build a nationwide, wholesale LTE network.
"I'm not going to look a gift horse in the mouth and then not take it," he said of the Verizon proposal. "If there's an opportunity there, our guys want to take it." He said Verizon has a standing invitation to brief the entire RCA board on its proposals.
Nancy Stark, a Verizon spokeswoman, told FierceWireless Verizon has had talks with a number of rural carriers over the past several months, and has also seen interest from rural carriers since the Journal report. However, she declined to name any of carriers or say when any deals might be reached.
Stark said the carriers Verizon has been talking with have signed non-disclosure agreements, meaning that associations would not know if they were in touch with Verizon. "This obviously has to be something that the carrier wants," she said. "It's an opportunity for rural carriers to be on the cutting edge of a brand new technology. We've seen a lot of interest in it."
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