Monday, December 19, 2011

Verizon to buy Cox's AWS spectrum for $315M

            



Cox Communications said it will sell 20 MHz of its AWS spectrum covering 28 million POPs to Verizon Wireless for $315 million.
The deal comes two weeks after Verizon agreed to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. Cox said the deal does not include its 700 MHz spectrum licenses, the company's Cox Wireless customer accounts or any other assets. However, Cox spokesman Todd Smith told FierceWireless the deal includes all of Cox's AWS spectrum licenses.

Additionally, just as in the SpectrumCo deal, Cox and Verizon Wireless will also become agents to sell each other's residential and commercial products and services through their respective sales channels. Over time, Cox said it may have the option to sell Verizon Wireless' services on a wholesale basis, something Comcast and Time Warner have said they will do. Cox also said it expects to enter into arrangements with the innovation technology joint venture formed by Verizon Wireless, Comcast, Time Warner and Bright House to better integrate wireline and wireless products and services.

The Cox-Verizon deal is subject to regulatory approval and while Smith declined to give a specific timeframe he said "we're obviously working hard to make it happen as soon as possible." A person familiar with the SpectrumCo-Verizon deal who asked to remain anonymous told FierceWireless earlier this month that the regulatory review for that deal is expected to take six to nine months.

Taken together with the SpectrumCo deal, the Cox AWS spectrum could give Verizon, the nation's largest carrier, an even greater spectrum advantage over its rivals if the deals approved. The SpectrumCo deal would give Verizon a total of around 110 MHz of nationwide spectrum. Verizon has said it plans to use AWS spectrum to supplement its 700 MHz spectrum for its LTE network, thereby providing additional capacity for LTE traffic. 

The deal also signals the unwinding of Cox's independent wireless position; in November, Cox said it would abandon its wireless service offering by the end of March, effectively killing a year-long experiment by the MSO to build its own wireless network and provide wireless as part of a quad-play bundle.
In 2006, Cox teamed with Comcast, Time Warner Cable and Sprint Nextel as the SpectrumCo joint venture to bid on AWS spectrum licenses during the FCC's Auction 66. (Sprint exited SpectrumCo in 2007.) SpectrumCo in 2006 spent $2.4 billion on licenses covering most of the populated areas of the United States. In November 2008, Cox exited SpectrumCo (according to this FCC filing) and took with it 31 AWS licenses in parts of California, Georgia, Oklahoma, the Southwest and elsewhere.


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