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Verizon offers to sell some 700MHz spectrum in olive branch to government

Verizon offers to sell some 700MHz spectrum in olive branch to government

In an effort to save its spectrum deal with major cable companies, Verizon Wednesday said it would be willing to sell off several licenses for spectrum on the 700MHz band.

Verizon said that if the government approved its spectrum-purchasing agreement with the companies, it would sell off its licenses on the so-called "A" and "B" blocks on the 700MHz spectrum band. Verizon primarily uses 700MHz spectrum from the "C" block for its 4G LTE network and thus would not need to hold onto the A and B blocks if it succeeded in acquiring licenses for Advanced Wireless Services (AWS) spectrum currently held by several cable companies, including Comcast, Time Warner Cable, Bright House Networks and Cox.

RELATED: Verizon defends cable spectrum deal at Senate hearing

ANALYSIS: LTE spectrum: How much do the big carriers have?

Spectrum on the 700MHz band is currently the cream of the crop for LTE services in the United States as it has the lowest frequency and best propagation of any spectrum currently being used for commercial LTE offerings. Verizon originally won the rights to licenses on the A, B and C blocks through the FCC's 2008 spectrum auction of the 700MHz band.

"Since wireless operators ... have expressed concern about the availability of high-quality spectrum, we believe our 700MHz licenses will be attractive to a wide range of buyers," said Molly Feldman, Verizon's vice president of business development. "Provided our acquisition of AWS spectrum is approved, our open sale process will ensure these A and B spectrum licenses are quickly and fairly made available for the benefit of other carriers and their customers."

Verizon's plan to buy AWS spectrum has been controversial ever since the company announced late last year that it planned to purchase 122 AWS licenses from Comcast, Time Warner and Bright House for $3.6 billion. The company subsequently worked out a deal with Cox to purchase 20MHz on the AWS band for $315 million. The deal has attracted the attention of both lawmakers and government regulators as the FCC has asked Verizon to deliver a wide range of information on its spectrum holdings and its plans for the spectrum it wants to acquire from the cable companies. Among other things, the letter asked Verizon to detail why spectrum in the prized lower 700MHz band was not suitable for expanding out LTE at a nationwide level; whether the company had considered repurposing spectrum currently used for other services; to provide all analyses about how Verizon would use the companies' spectrum for its LTE services and to detail the cost impacts of adding the spectrum to its LTE portfolio; and to provide a timeline of all talks between Verizon and the cable companies leading up to their proposed spectrum deal.

News of the deal also prompted a hearing in front of the Senate Judiciary Committee where Verizon was asked to justify its need for more spectrum despite its already-substantial holdings. Some of Verizon's competitors, including Sprint, T-Mobile and the Rural Cellular Association, have also been critical of the deal and have said that it would give Verizon an unfair advantage in spectrum holdings.

For its part, Verizon has defended the need for more AWS spectrum by claiming that it will face a "spectrum crunch" in some key markets as soon as 2013. The company says that it has seen data usage double each year for the past three years.

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