Verizon Wireless on Wednesday revealed plans to sell spectrum licenses covering major U.S. cities and smaller markets in a move that could alleviate the concerns of U.S. regulators who are reviewing the wireless giant's plans to spend billions of dollars on the rights to airwaves held by a consortium of cable companies.
Verizon Wireless said the planned sale of its 700 MHz A and B spectrum licenses is contingent on the company closing its purchases of AWS licenses from SpectrumCo – a consortium jointly owned by Comcast, Time Warner Cable and Bright House Networks – Cox and Leap Wireless.
The Federal Communications Commission and U.S. Department of Justice are in varying stages of reviewing the transactions above, and Verizon expects the agreements to close by the middle of the summer.
In a research note, Stifel Nicolaus analyst Christopher King said Verizon's planned sale could help the company win regulatory approval to acquire the AWS spectrum.
"By putting its 700 MHz band lower A&B block licenses on sale, Verizon could ease potential regulatory concerns about its concentration of spectrum holdings," King wrote, "though there could be concerns that AT&T would be the main buyer."
The 700 MHz A and B licenses cover dozens of major U.S. cities and a number of smaller and rural markets across the country. Some of the larger cities include Atlanta, Dallas, Denver, New York, Philadelphia, Los Angeles and San Francisco.
Verizon Wireless, the largest U.S. mobile-phone operator, said it will commence the process of soliciting interest from potential buyers. The company has retained Stephens Inc., an independent financial services firm based in Little Rock, Ark., to manage the offering process.
The wireless giant has endured criticism that it's hoarding spectrum at a time when wireless carriers face a potential capacity crunch due to the extraordinary demand for data services on mobile devices. The FCC has acknowledged the need for more spectrum.
"Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers," said Molly Feldman, vice president of business development for Verizon Wireless, in a statement.
In spite of the announcement, some groups continue to raise concerns over Verizon's pending $3.6 billion purchase of spectrum from SpectrumCo and related agreements between the wireless provider and cable companies to jointly market each other's products and services.
“There is less than meets the eye to Verizon’s spectrum sale," asserted Harold Feld, legal director of Public Knowledge, in a statement. "At the end of the day, Verizon and the cable companies will still have created a cartel in which Verizon will rule the air for wireless broadband and cable will offer the only widespread true high-speed landline Internet services."
