5 Ways the Verizon Spectrum Deal Could Affect You
From a distance, Verizon Wireless 's $3.6 billion deal to get advanced wireless spectrum (AWS) from four cable companies may seem like some massive companies batting around serious coin for big bandwidth with limited impact on little guy -- or gal -- on the other end of the smartphone.
This is not the case, however. If -- as seems likely -- the deal is approved by the Federal Communications Commission (FCC) soon, it could create more device choices and the ability to switch between operators' 4G networks more easily than you can today.
What is AWS spectrum, anyway? Advanced Wireless Service spectrum is bandwidth in the 1700MHz and 2100MHz bands in North America. T-Mobile US Inc. uses it for both its 3G and so-called "4G" services right now. The spectrum is particularly suited to dense buildouts in cities where long-range wireless propagation is less of a concern.
Verizon would get 122 Advanced Wireless Spectrum (AWS) licenses in the deal, covering about 259 million people in the U.S. It also plans to swap AWS spectrum in 218 markets with T-Mobile.
This matters because presently, Verizon and AT&T Inc. (NYSE: T) have balkanized their 4G LTE deployments. Even though both are using different bands on the 700MHz spectrum, you and I cannot buy a single device that moves between the two networks.
The AWS deal has the potential to change that. As part of its latest concessions to get the deal, Verizon has said it will allow roaming on the new network for at least five years once it is deployed.
Verizon says it would cover 30 percent of the licenses' combined footprint within three years and 70 percent within seven years.
Here's what it all might mean for you:
1. More device choices With two major carriers in the U.S. -- Verizon and T-Mobile US Inc. -- planning to use AWS spectrum for LTE and smaller operators, Cricket Communications Inc. and MetroPCS Inc. (NYSE: PCS), also using the bandwidth, there's more incentive for vendors to develop devices with the radios onboard. An Apple Inc. (Nasdaq: AAPL) iPhone specifically for the T-Mobile networks could finally become a reality. It should be noted that AT&T Inc. (NYSE: T) has AWS licenses but gave many to T-Mobile after the failure of that $39 billion merger plan.
2. Better 4G coverage in the U.S. As part of the deal, Verizon has agreed to allow operators with a comparable-generation technology to roam onto the network on what it deems fair commercial terms while deploying the network on AWS at a reasonable pace. For T-Mobile customers and others, this could mean fewer places that don't offer a fast LTE data connection in several years time. The only rub is that Verizon didn't make crystal clear what it will consider a "comparable generation."
3. You could go for an unlocked device With two major carriers in the U.S. extensively using AWS spectrum for 4G, it might start to make sense for consumers that travel a lot to spend more on an unlocked phone or tablet and use two SIM cards and pay-as-you-go plans to get the best service in different areas of the country. T-Mobile offers a $50 month-by-month plan, although it is not yet known if this will carry over to its LTE network in 2013. Canny users could certainly save money in the long run by taking this approach as they pick and choose their wireless data operator each month.
4. Easier LTE roaming between the U.S. & Canada, eh? In the coming years, AWS use in the U.S. could make roaming between America and our neighbors to the north a breeze. Bell Mobility Inc. , Rogers Corp. and Telus Mobility all have LTE on AWS in Canada.
5. Worse battery life on new LTE devices Well, they can't all be sunshine and unicorns. It's no secret that battery life is already a big concern on LTE smartphones. It can be next to impossible to make it through the day on a single charge if you're a big data user. Adding AWS support to 700MHz radios is unlikely to help matters. But it will likely be a couple of years before Verizon has to worry about this so -- with any luck -- battery technology might improve in the interim.
For more Light Reading has covered the spectrum deal since it was first proposed, read up on the gory details below:
- Wait for It! Verizon 4G Deal Still Needs FCC OK
- Regulators Aim to Restrict Verizon/Cable Spectrum Sale
- Sprint Wants to Snip the Verizon/Cable Bundle
- T-Mobile: We Need Verizon Spectrum to Compete
- Verizon Spectrum Debate Escalates