AT&T Closes $1.9B Verizon Spectrum Buy

AT&T has closed its $1.9 billion acquisition of spectrum licenses from Verizon Wireless, a transaction announced in January. (See: AT&T Strikes $1.9B Spectrum Deal With Verizon.)

The deal gives AT&T Inc. (NYSE: T) 39 lower 700MHz B Block licenses it can use to bolster its LTE network in 18 US states: Colorado, California, Idaho, Florida, Illinois, Louisiana, Montana, New Mexico, New York, Ohio, Oklahoma, South Dakota, Tennessee, Texas, Utah, Virginia, Washington, and Wyoming. In exchange, the carrier has given Verizon Wireless Advanced Wireless Services (AWS) spectrum in Phoenix; Los Angeles; Fresno, Calif.; Albuquerque, N.M.; and Portland, Ore.

The deal closed around the same time that AT&T agreed to work with the Federal Communications Commission (FCC) on interoperability in the lower 700MHz bands. AT&T was staunchly opposed to support for LTE band 12 in its devices, since it operates in band 17. However, it did an about-face Tuesday by agreeing to support band 12 and work on any interference issues that could come up between bands 17 and 12 to work toward interoperability.

Why this matters
AT&T plans to reach 420 cities and cover 270 million people before the end of the year, and it's well on its way to reaching those numbers. At last count, it was in 397 cities covering 225 million people. Verizon's spectrum, in the valuable 700MGHz bands, covers 42 million people and will give AT&T more bandwidth to reach its objectives. (See: AT&T Close to 400 Live 4G LTE Markets.)

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— Sarah Reedy, Senior Editor, Light Reading

RitchBlasi 9/11/2013 | 1:43:11 PM
Spectrum You know, I probably have a totally different view from many others on this topic.  for example, the FCC judges competition in a market by the number of mobile  providers that own and operate networks...and I beleive that is the same resolve they take when deciding that large carriers should not be part of the next spectrum auction.  It would be anti-competitive.

I can go on and on about this, but to keep it short...is it better to have fewer networks that are more robust to handle what is termed, "the upcoming data tsunami," or share it among smaller companies that might not have the financial strength to make the most of it?  As far as competition goes, walk into any Best Buy, Walmart, etc. and consumers/businesses have their choice of probably a dozen or so companies offering mobile services - many at significant savings over the owners and operators of the networks they use.

For those old farts, like myself, who not only were around at the time the first cellular phone was used in 1983, but when there was a Bell System made up of more than 20 companies that was broken up in that same year, this could turn into having the same result as far as mobile providers.  I believe AT&T, Verizon and Quest are what's left of the 20+ companies divested in 1983.

With limited assets (spectrum) and growing demand for new bandwidth-intensive services by customers, to name a couple, mergers and acquisitions will continue in order to best serve our mobile generation.  Three nationally owned/operated networks with a variety of MVNOs for competition/choice, might be all that's needed.

Sarah Thomas 9/11/2013 | 1:22:01 PM
Re: Spectrum is Golden But is the need shared equally across operators? It seems like the bigger ones are vocal about, but then do things that are counterintuitive -- ie. AT&T has to buy T-Mobile, but then rolls out LTE just fine without it. Not always, but often, seems like a way to justify higher prices and policies.

RitchBlasi 9/11/2013 | 1:07:31 PM
Spectrum is Golden In all my years in the mobile/wireless industry these words have never been uttered, "we have enough spectrum."  With new bandwidth-hog apps and services coming out on a daily basis, the last mile between the device and the cell site - the licensed air waves  - are the only true choking block moving forward.  More hardware, software and backhaul can always be added to a mobile network...there are limited airwaves.  Hey, like I have always said, you can't push a potato through a straw.  Now the FCC needs to get on with its auction and make as much available as soon as possible.  

What some folks don't understand is that there are industries waiting to develop that can't because of their ultimate reliance on mobile connections.  For example, mHealth.  There needs to be enough spectrum so that mobile carriers can offer that industy guarantees that health data sent over the mobile networks have the same quality as wired networks.  I don't know about you but I would want a few bits/bytes of data from my MRI falling from the sky when a doctor needs to make a diagnosis...you?  mHealth can be a catalyst for new jobs, better healthcare for more people and help reduce the ridiculous costs we pay -- with and without Obamacare.

Spectrum IS golden regardless of what anyone says.

Sarah Thomas 9/11/2013 | 12:53:54 PM
Spectrum "crisis" We're discussing the spectrum crunch on our live chat now. Is it safe to say the big crisis is over in the US? I think for the big four operators, it is, thanks to a bunch of deals like this. For the smaller, regional players, however, they might be in even more trouble as the big players keep getting bigger.
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