U.S. Cable Giants Sell Spectrum Worth $3.6 Billion to Verizon

PHILADELPHIA/BASKING RIDGE/NEW YORK/ORLANDO: Verizon Wireless plans to pay $3.6 billion for wireless airwaves from Comcast, Time Warner Cable and Bright House Networks, collectively known as SpectrumCo.

The deal, subject to FCC approval, is for 122 Advanced Wireless Services (AWS). The joint venture paid $2.4 billion for 137 AWS licenses in a 2006 auction at the U.S. Federal Communications Commission. Comcast, the biggest stakeholder in SpectrumCo, will take in $2.3 billion from the sale. Time Warner Cable will receive $1.1 billion, and Bright House will get $189 million. The spectrum covers about 85 percent of the country’s population.

The deal also includes the option for Verizon to sell cable service in its stores and for the cable companies to get access to the wireless network on a wholesale basis.

Lately there had been speculation that the cable companies had intentions of creating their own wireless network.

A statement from the companies said the sale of spectrum is "an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage. While government action to free more spectrum is expected, this transaction ensures that the spectrum which is already available for mobile services is used effectively to serve customers."

Neil Smit, the president of Comcast Cable, said, “These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services. We’re excited about this partnership with Verizon Wireless and the future innovations we will bring to consumers.” 

Dan Mead, the president and CEO of Verizon Wireless, added, “Americans deserve excellence from a wireless service provider, and innovative wireless companies plan ahead in order to deliver on that expectation. Spectrum is the raw material on which wireless networks are built, and buying the AWS spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers. American businesses and consumers can have confidence that the best wireless network has the foundational resources to deliver on that promise.”

Rob Marcus, Time Warner Cable’s president and COO, commented, "We’re excited to be able to offer the nation’s best wireless services to our customers and to have Verizon Wireless as a sales channel for our superb wireline services.  We’re also pleased to have obtained an attractive price for the spectrum we’re selling."

Steve Miron, Bright House Networks’ CEO, added, "We are always looking for ways to provide new and exciting product offerings for our customers. We look forward to working with our partners through these agreements toward achieving that end goal to add additional value for our customers."