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Mergers & acquisitions

MSOs Sell AWS Spectrum to Verizon for $3.6B

Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC) and Bright House Networks -- MSOs involved in the SpectrumCo LLC joint venture -- have inked a deal to sell their Advanced Wireless Services (AWS) spectrum to Verizon Wireless for US$3.6 billion, and, as part of the agreement, have included an option that will let the MSOs sell Verizon Wireless services on a wholesale basis.

Under the financial end of the deal, Verizon will acquire SpectrumCo's 122 AWS spectrum licenses covering 259 million POPs, with Comcast, which owns 63.6 percent of SpectrumCo, set to receive $2.3 billion from the sale, and TW Cable (31.2 percent) to get $1.1 billion, and Bright House (5.3 percent) to net $189 million.

The MSOs will come away with a handsome profit if the deal passes muster at the Federal Communications Commission (FCC) . When SpectrumCo won the licenses in 2006, Comcast paid $1.29 billion and TWC paid $632.2 million. (See SpectrumCo Gets Licenses and Sprint to Exit SpectrumCo Venture .)

On the product and service end of the deal, MSOs and Verizon Wireless, in addition to the aforementioned wholesale component that will come into play "over time," will also become agents to sell one another's products. On top of that, the MSOs and the wireless operator will form a technology joint venture that aims to "better integrate wireline and wireless products and services."

Comcast Cable President Neil Smit noted in a statement that the agreements, together with the MSO's own Wi-Fi buildout plans, "enables us to execute a comprehensive, long-term wireless strategy…" Verizon Wireless President and CEO Dan Mead, meanwhile, said the AWS capacity purchase will bolster its Long Term Evolution (LTE) strategy and "now solidifies our network leadership into the future."

Why this matters
In addition to giving Verizon Wireless additional capacity for LTE, the deal lays to rest any worry from Wall Street that the MSOs would use their AWS capacity to build out their own wireless network. The deal also simmers speculation that the MSOs could step in and do a deal with T-Mobile US Inc. now that its pending acquisition by AT&T Inc. (NYSE: T) is in hot water. (See FCC OKs AT&T’s Merger Application Withdrawal .)

The deal with Verizon Wireless would also appear to put Sprint Corp. (NYSE: S), cable's traditional wireless partner, out of the long-term wireless plans at Comcast, TW Cable and Bright House. It also calls into question cable's near-term commitment to the struggling Clearwire LLC (Nasdaq: CLWR). (See Sprint Keeps Clearwire (& Unlimited) Alive.)

Today's deal may also shed light on plans underway at Cox Communications Inc. , a SpectrumCo partner that paid $248 million for its AWS spectrum licenses. That MSO, which recently decided to shut down its wireless service, has yet to reveal what it intends to do with its AWS and 700MHz spectrum that originally was tagged to help Cox build out its own wireless network. (See Cox: We're Not Selling Our Spectrum.)

For more
Catch up on cable's wireless twists and turns.



— Jeff Baumgartner, Site Editor, Light Reading Cable



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paolo.franzoi 12/5/2012 | 4:46:58 PM
re: MSOs Sell AWS Spectrum to Verizon for $3.6B

&nbsp;


jt,


Depends on what you mean.&nbsp; QAM, QSK, DPQSK, PAM and even DMT were used in wireline modems back in the 1960s, 1970s, and 1980s.&nbsp; (See the link for a description of a dial modem company using DMT http://en.wikipedia.org/wiki/T... ).&nbsp; One of my former employers (during those days called Milgo Electronics Corporation) was building 14,400 bit per second leased line multiport, multidrop modems in the 2nd half of the 1960s.&nbsp; They had other competitors (Codex and Paradyne for example) that built similar products.&nbsp;


Most of these modulation schemes have been around from the 1950s when lots of signaling work was done as part of research for wireless communications for the military.&nbsp; Some of the advances come from surprising sources http://en.wikipedia.org/wiki/H... .


So the modulation scheme knowledge is pedestrian.&nbsp; What is real is the ability to build good matching systems for attennas and good receivers based on understanding the channel characteristics.&nbsp; This is why I keep saying that Shannon and Nyquist rule here.&nbsp; What has happened is DSP technology has lowered the cost of building high speed modulators and demodulators.&nbsp; In the old days, we built our own DSP silicon then switched to TI DSPs.&nbsp; But think about all these digital comms (Qualcomm, Broadcomm, TI, Lantiq)...its all DSP technology.


seven

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