The deal, announced Friday, will hand Verizon Wireless 20MHz of Cox AWS spectrum covering 28 million POPs. Cox hasn't decided the fate of its existing 700MHz spectrum licenses.
"This decision has no impact on our 700MHz spectrum. We remain in full compliance with FCC spectrum requirements. We believe spectrum continues to be a valuable asset, but can't speculate on future plans," a Cox spokesman told Light Reading Cable via email.
Cox declined to say how much it paid for its AWS spectrum (it paid more than $550 million for its AWS and 700MHz spectrum won at auction), but the other SpectrumCo MSOs (Comcast, TW Cable and Bright House) stand to make tidy profits on the sale of their respective AWS assets.
Why this matters
The Cox-Verizon deal isn't a huge surprise, but it effectively gets Cox back into the wireless game and on track for a Long Term Evolution (LTE) strategy following its aborted attempt to go it alone. It recently decided to shut down a mobile service it's running on Sprint Corp. (NYSE: S)'s 3G network next March, acknowledging that the MSO lacked the scale to compete in the wireless marketplace and gain access to "iconic wireless devices." Before that, Cox scuttled plans to build out its own wireless network using a combination of its AWS and 700MHz spectrum.
The new deal will let Cox bundle and sell Verizon Wireless services with its cable lineup, and vice versa. Cox, like the SpectrumCo MSOs, also has an option to sell Verizon Wireless services wholesale under an MVNO model. That component doesn't come into play for about four years.
For Verizon Wireless, it stands to obtain valuable AWS spectrum that fits "hand-and-glove" with the company's 700MHz capacity, as company President and CEO Lowell McAdam put it earlier this month at an investor's conference. (See MSO Deal Not Verizon's Spectrum 'End Game' .)
Read more about Cox's wireless adventures and cable's recent connection with Verizon Wireless:
- Verizon Wireless: Cable’s New BFF
- MSOs Sell AWS Spectrum to Verizon for $3.6B
- Cox Pulls Out of Wireless
- Cox Chucks Wireless Network Plan
- Cox Expands Wireless Rollout
- Cox Wireless Is Go for Launch
- Cox Wireless: The Starting Lineup
- Cox Preps Cellular Network, Eyes LTE
— Jeff Baumgartner, Site Editor, Light Reading Cable