Verizon Wireless Wooing Spectrum Regulators With $4.4 Billion Worth Of Airwaves

Right now Verizon Wireless is so dang flush with airwaves that everyone else wants, it’s all rolling around on a bed of airwaves being like, “Airwaves? Which airwaves? Oh, you mean these? Don’t need’em!” At least that’s what it says it will do if regulators let the company buy the new chunks of spectrum they want from cable companies.

The only potential fly in Verizon’s eye, says the L.A. Times, could be those persnickety regulators, who need to approve the company’s planned purchase of spectrum from large cable companies.

Back in 2008, Verizon bought $4.4 billion in airwaves in a government auction, but now the company says it won’t need that spectrum in order to deploy its fourth-generation LTE network. It all hinges on chunks of spectrum Verizon wants to buy from a consortium of Comcast, Time Warner Cable and Bright House Networks, among others.

The spectrum it wants to sell covers large areas including L.A., New York, Chicago and other big metro areas. In the world of wireless, spectrum is highly-coveted, as experts see a “spectrum crunch” looming ahead because of our greed for data on the go.

The Federal Communications Commission and the Department of Justice are on top of things and taking a look at the planned purchases. Verizon’s probably playing a bit of a brown-noser right about now, as the intention to sell the spectrum they have might win them some points with regulators.

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700-megahertz licenses will be attractive to a wide range of buyers,” said Molly Feldman, vice president of business development at Verizon Wireless.

Critics of the idea say Verizon’s offer to sell spectrum won’t actually result in more wireless competition. It would seem likely that AT&T would just buy Verizon’s spectrum, and if AT&T ever had some to sell, Verizon would buy it up.

To that point, T-Mobile has already asked the FCC to stop Verizon’s plan.

Verizon Wireless plans to sell coveted airwaves [L.A. Times]

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  1. MutantMonkey says:

    If you have that much extra spectrum, why are you charging $15 a month for text messaging?

    • consumed says:

      Because they have to pay for the towers, antennas, and expensive radio equipment that turns that spectrum into usable frequencies that they can transmit and receive your text messages on.

  2. Cat says:

    Some mega-cities *may* have a problem well into the future.

    But no. There is no “spectrum crisis”.

  3. Boiled for your sins says:

    Did Verizon calculate that value themselves?

    • NeverLetMeDown says:

      No, it’s what they paid for the spectrum in a public auction in 2008.

      • vastrightwing says:

        They should triple check to make sure they put the decimal point in the right place. That’s all. Given their track record with math.

  4. kosmo @ The Soap Boxers says:

    Why doesn’t someone just make more spectrum?

    /s

  5. finbar says:

    I wonder how it would work if the Fed’s allocated the spectrum to whatever company could offer the highest speed at the lowest cost, rather than auction it to the highest bidder.

    • SBR249 says:

      Nothing because this world is not the perfect ideal world that you imagine it is. In that world, a well-meaning company would swoop in, set up a fast network and offer it at cut rate prices.

      In the real world, companies will engage in a race to the bottom to out-compete one another to win spectrum licenses and then go belly up before building anything when they realize that the agreed upon price would be insufficient to recoup the infrastructure cost. Then the feds will take back the spectrum and restart the process. Lather, rince, and repeat. Then some bright genius will figure out that this would be the perfect way to take up spectrum, bog down the system, and prevent anyone else from actually trying to start something legitimate and thus stifling competitors in the market. Then that spectrum will never get used because the system will just be abused.

      The other viable alternative would be to go the franchised monopoly route that local governments do with utilities like cable television/internet. Oversight n prices would then be provided by a public utilities commission. But if you’ve been reading the Consumerist in the past few years you’ll know how popular this model is.

  6. parv says:

    “Right now Verizon Wireless is so dang flush with airwaves that everyone else wants, it’s all rolling around on a bed of airwaves being like, “Airwaves? Which airwaves? Oh, you mean these? Don’t need’em!” — Mary B Q

    Hey Quirk, I like you much.

  7. yankinwaoz says:

    This is not what it seems. It is a ruse. The spectrum that Verizon owns is required to be shared. They want to trade it for spectrum that is exclusive.

    The reason for this is that the duopoly we have in the US for wireless wants to create an artificial shortage in order to raise prices. Verizon and AT&T have no plans to make more efficient use of what they have. The business plan is to lock up most of the spectrum out there and and then gouge the consumers.

    It is going to get really, really bad in the future for us because of the control these two companies have over Congress.