Verizon to Divest Spectrum in Cable Deal - The UpStream

Verizon to Divest Spectrum in Cable Deal

posted Saturday May 26, 2012 by Scott Ertz

Verizon to Divest Spectrum in Cable Deal

Over the past few months, Verizon has made some deals with cable companies to enhance their reseller agreements and pick up some new spectrum. However, like the Alltel acquisition, Verizon will not be allowed to keep everything they own to make this happen.

Currently, Verizon is in talks with 36 different firms who are interested in purchasing some of their 700MHz spectrum, assuming their acquisition is approved. Currently, Verizon's LTE network is built in the 700MHz C spectrum, while A and B are what are up for sale, pending approval. They claim that the new spectrum is more compatible with their existing LTE network that some of what they already own.

Not everyone is happy about this deal. Hit the break to read what the Senate has to say about it.

Sen. Herb Kohl, chairman of the Senate's antitrust subcommittee, wrote a letter to FCC Chairman Julius Genachowski and Attorney General Eric Holder, stating,

In brief, without reaching any final judgment as to the legality of these transactions under the antitrust laws or Communications Act, I believe these transactions present serious competition concerns which should be examined closely by your agencies...

Sprint and T-Mobile are also unhappy with what is happening. They have argued that Verizon's spectrum purchase is "a clear threat to competition." Verizon disagrees, speaking to Congress, claiming that they are essentially trading one block of spectrum for another, more compatible with their existing holdings. The real complaint, however, is in the triple- and quadruple-play bundle deals Verizon has worked out with these cable companies. Essentially, this will give Cox, Time Warner and Bright House Networks, among other, customers to get a deal on wireless service through Verizon if they have cable service.

Based on the FCC's history, this deal might not go through. If not, Verizon will be out a lot of money, but these cable companies will continue to be saddled with unusable spectrum, as well. They have been speedy in their decisions, though, so we might know soon.


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