WCO spars with Oklahoma school over spectrum transaction

Roughly a year ago, WCO Spectrum appeared to have scored an agreement with the Owasso public school district in Oklahoma to purchase the district's 2.5GHz spectrum license.

However, the transaction appears to have collapsed, and the details surrounding the situation remain vague.

The situation is noteworthy considering WCO and T-Mobile are engaged in an increasingly acrimonious legal battle over spectrum licenses in the 2.5GHz band. T-Mobile argues WCO is making "sham offers" for such spectrum licenses and that the investment firm "lacks the capacity to make good on anything remotely approaching all of these offers."

But WCO counters that T-Mobile is engaging in a campaign of "threats, intimidation, and – most effectively – litigation" against the schools that own such licenses.

The Owasso license was to be WCO's first 2.5GHz license purchase. But the purchase never happened.

He said, she said

Jordan Korphage, the director of communications for Owasso Public Schools, confirmed to Light Reading that the school district did not sell its license to WCO, as it had intended to in a transaction initially announced last year.

"We were informed that their offer had been rescinded sometime in January, I believe, and we haven't had contact with WCO since," Korphage wrote in response to questions from Light Reading.

Korphage declined to offer any more comments on the topic but added that the school remains open to discussions with WCO. "Should there be a mutually beneficial transaction available in the future, we would certainly be open to that," Korphage wrote.

But WCO's Carl Katerndahl said the school walked away from the deal. "Owasso was unable to meet the terms of the agreement. WCO provided the district with additional time, and they were unable to meet the deadline," he wrote in response to questions from Light Reading. "For the record, the agreement expired. We never walked away from the agreement."

Katerndahl added that the school didn't receive a "final order" from the FCC confirming the transfer of the 2.5GHz spectrum license from Owasso to WCO. "They have reached out to us to reopen discussions as they are still interested in selling. We are considering it," he wrote.

The FCC must approve all spectrum transactions.

The filing details

According to Brian Goemmer of spectrum-monitoring company Spektrum Metrics, the FCC apparently approved the transfer of the 2.5GHz license from Owasso to WCO. The license holds a "Consented To" status in the agency's spectrum database.

"All indications are that the FCC has agreed to the application, but the parties have to close the financial aspect of the deal before the FCC will actually grant the license," Goemmer wrote in response to questions from Light Reading. "We would see the application as withdrawn if the licensee pulled it back or dismissed if the FCC felt it didn't meet the requirements."

However, WCO said the FCC approved the transaction only after the deal was terminated because Owasso didn't withdraw its filing with the FCC.

"My reading between the lines would be that Owasso decided to back out of the agreement with WCO, but their attorney from Oklahoma didn't withdraw the application, so the FCC ultimately approved it because they weren't given any information indicating that the parties are no longer in agreement," Goemmer explained. He noted that most companies, including WCO, hire lawyers based in Washington, DC, to handle legal work with the FCC.

Goemmer said he has no direct knowledge of the transaction between WCO and Owasso. He assessed the situation using the FCC filings related to the transaction and the two entities' public statements.

WCO continues to pursue 2.5GHz licenses

"Our contract with Owasso to purchase their license would have been our first [2.5GHz license] purchase and had a termination date, which Owasso was not able to meet. We then gave them an extension of three months and when they were unable to meet that, the contract expired," WCO's Katerndahl wrote in response to questions from Light Reading.

He said WCO has submitted contracts to purchase 13 different 2.5GHz licenses but hasn't yet purchased any. For most, he said that T-Mobile used its "right of first refusal" to purchase the licenses instead. T-Mobile's "right of first refusal" comes from its leases on those licenses.

As Light Reading has previously reported, WCO has been looking to purchase 2.5GHz spectrum licenses since the FCC changed its rules for the spectrum band in 2020. Before the FCC's rule change, only educational institutions – such as schools, universities and churches – could own 2.5GHz licenses.

However, purchasing such spectrum would essentially make WCO the spectrum landlord of T-Mobile. T-Mobile's midband 5G network is built atop roughly 2,000 spectrum leases with educational institutions nationwide. In some cases, those leases are decades old. The FCC's rule change for the band in 2020 was intended to eliminate that leasing complexity. As Light Reading previously reported, T-Mobile has acquired more than 200 of those licenses since the FCC changed its rules.

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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano