Feeds

Verizon slips $3.6bn shiv into AT&T, T-Mobile ribs

Wireless pecking order exploded by massive spectrum purchase

The Power of One Infographic

In a surprise move that sent shivers through its competitors, Verizon announced on Friday that it will pay $3.6bn to acquire a broad swath of Advanced Wireless Services (AWS) spectrum from SpectrumCo, a consortium composed of Comcast, Time Warner Cable, and Bright House Networks.

"Spectrum is the raw material on which wireless networks are built," Verizon president and CEO Dan Mead said in a statement, "and buying the AWS spectrum now solidifies our network leadership into the future."

Indeed it might. The 122 acquired AWS licenses, the announcement says, cover "259 million POPs." That'd be 259 million points of presence – or, to look at it another way, 259 million customers.

To get access to these POPs – and moms, one must assume – Verizon will pay SpectrumCo's majority owner Comcast $2.3bn, Time Warner Cable $1.1bn, and minority partner Bright House Networks $189m.

Not that those three companies will miss their departing AWS licenses. As cable companies, they were essentially just sitting on them since they bought them in 2006, waiting until the right buyer came along. And one can only assume that they'll make a nice, tidy profit from the deal.

The mood can't be all that sprightly in the corner offices of AT&T's Dallas, Texas, headquarters, what with the collapse of its T-Mobile merger effort – complete with back and forth sniping with the FCC – and now this surprise move by Verizon.

Neither can things be that cheery at the Bonn headquarters of Deutsche Telekom, T-Mobile's parent. In fact, we'd venture that T-Mobile is more threatened by Verizon's spectrum grab than is AT&T. Should the AT&T merger not go through – which seems likely – T-Mobile will have little room for expansion on its own, now that the biggest available chunk of AWS spectrum is no longer available.

There remains the chance that the FCC will find a way to free up more spectrum, as it has been trying to do, if only to ensure that there remains enough spectrum in the SpectrumCo new Verizon markets to enable competitors to, well, compete. And it's possible that Friday's announcement will fire up AT&T lobbyists enough to break the "anything the Obama administration wants, we don't" logjam that's paralyzing Washington.

It will be interesting to read the digital tea leaves as we watch how the FCC responds to the Verizon move. After all, they still need to approve it before it can go through.

Historically, these kinds of FCC reviews can take up to a year, or even longer. Amid the white heat of the exploding wireless broadband revolution, however, we're expecting a quicker approval process this time around. ®

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
Want to beat Verizon's slow Netflix? Get a VPN
Exec finds stream speed climbs when smuggled out
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.