FCC votes to approve Verizon spectrum deals

24 Aug 2012

As expected, the Federal Communications Commission (FCC) has approved Verizon Wireless’ USD3.9 billion purchase of 20MHz of nationwide Advanced Wireless Services (AWS) spectrum from a group of cable companies known as SpectrumCo, as well as related deals which will see the mobile giant offload surplus frequencies to T-Mobile USA and Leap Wireless. However, the watchdog has attached several restrictions and conditions to the deals, primarily related to buildout requirements and data roaming obligations. Requirements include:

• Verizon Wireless must close its proposed spectrum transfer with T-Mobile within 45 days of its closing of the SpectrumCo, Cox, and Leap transactions;

• Within three years, Verizon Wireless will provide signal coverage and offer service to at least 30% of the total population in the Economic Areas, or the portions of Economic Areas in which it is acquiring AWS-1 licence authorisations (calculated by summing the population for each of these areas);

• Within seven years, Verizon Wireless will provide signal coverage and offer service to at least 70% of the population in each Economic Area in which it is acquiring AWS-1 licence authorisations, or, where a portion of the Economic Area is acquired, to at least 70% of the population of the total acquired portion of the licensed Economic Area;

• In the event the current data roaming rule is not available to requesting providers, Verizon Wireless will continue to offer roaming arrangements for commercial mobile data services on any of its spectrum in the areas where it is acquiring AWS-1 spectrum to other commercial mobile data service providers on commercially reasonable terms and conditions, and providers may negotiate the terms of their arrangements on an individualised basis. This commitment will remain in place for five years following the date of the Commission’s order;

• Verizon must provide, on a semi-annual basis, subject to an appropriate protective order, reports concerning trends in DSL subscribership following the implementation of the commercial agreements.

As previously reported by TeleGeography’s CommsUpdate, Verizon will use the AWS spectrum to augment its existing 700MHz LTE network. In June T-Mobile USA, the United States’ fourth largest mobile operator by subscribers, announced that it had signed an agreement with Verizon for the purchase and exchange of certain AWS spectrum licences covering 218 markets across the US, helping to pave the way for the FCC’s approval of Verizon’s parallel deal with SpectrumCo. According to T-Mobile the transaction would improve its spectrum position in 15 of the top 25 markets in the US. Going forward, Verizon has agreed to sell its 700MHz Lower A and B Block spectrum if the AWS spectrum deal was approved; it recently disclosed there are 64 companies that have expressed interest in buying the frequencies.