Verizon to spend $3.6 billion to acquire 122 AWS spectrum licenses covering 259 million Americans

Forget about all the drama happening between AT&T, T-Mobile, and the FCC. Verizon just made things serious by announcing their intent to acquire 122 AWS spectrum licenses from SpectrumCo for $3.6 billion. Now who exactly is SpectrumCo? They’re a joint venture that’s 63.6% owned by Comcast, so they’ll get approximately $2.3 billion from the sale, 31.2% owned by Time Warner Cable, who will get approximately $1.1 billion, and 5.3% owned by Bright House Networks, who stands to receive approximately $189 million. What exactly does Verizon get with their 122 AWS spectrum licenses? To quote an article on Phone Scoop from way back in October 2006 when SpectrumCo won the spectrum that they’ve just sold:

“They picked up 20 MHz licenses in the B block covering most of the populated areas of the continental US, plus an odd extra 10 MHz in Houston.”

Now let’s not forget, Verizon also spent about $2.8 billion on AWS spectrum during the previously mentioned October 2006 auction. Again quoting from that same Phone Scoop article:

“Every license they won was a big ol’ 20 MHz chunk. They even snapped up the most valuable license of the whole auction: the 20 MHz F block for the Northeast. That license alone cost them over $1.3 billion.

They also picked up the valuable F block in the Southeast, Great Lakes, and Mississippi Valley regions, giving them a huge swath of 20 MHz spectrum covering the whole Mississippi river area and everything east of it, well over half the country (in population.)”

SpectrumCo, as far as we know, never bothered to use the spectrum they purchased just over half a decade ago. What’s Verizon going to do with it? Their press release doesn’t go into details, though it hints that it may be used to build out their 4G LTE network:

“Spectrum is the raw material on which wireless networks are built, and buying the AWS spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers.” — Dan Mead, President and CEO of Verizon Wireless (pictured above)

The fate of T-Mobile just got that much more interesting. What happens if they partner with Verizon on a hybrid AWS HSPA+/LTE 4G network, yet maintain their current 2G network for voice/sms? Crazier ideas have been thought up. Watch this space.

[Photo Credit: The New York Times]

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