Verizon and SpectrumCo, the consortium of cable operators, has officially asked the FCC to transfer the cable ops 122 wireless spectrum licenses to the telco.
In the public interest statement from the two explaining why the FCC should allow the transfer of the licenses, Verizon and SpectrumCo argue that the deal "will enable Verizon Wireless to add network capacity to meet growing demand, so that customers will continue to enjoy the high-quality, high-speed services that state-of-the-art wireless broadband technology can provide."
The cable co.'s have concluded that "constructing and operating a standalone facilities-based wireless network with that spectrum would not provide a return that would warrant incurring the substantial costs and risks involved."
The spectrum represents 20 MHZ in 120 markets, except Houston, which has 30 MHZ. They point out that it is simply a license transfer of spectrum not currently being used, so there are no nonspectrum assets like facilities or customers and no reduction in choices for wireless servcie in the affected areas. As a result, they argue, the FCC's review should be expedient and limited since there are no anticompetitive effects, they say, sadding: "The spectrum transfers comply with all Commission rules, require no waivers, and will not result in any violation of the Communications Act or any other applicable statutory provision."
While the companies say the sale would help relieve some of the spectrum capacity crunch-a White House as well as FCC -- it says Verizon will still need more and still supports the FCC plan on reclaiming 500 MHZ from broadcasters and others.
SpectrumCo is a consortium owned by Comcast (63%), Time Warner Cable (31.2%) and Bright House (5.3%), which bought the spectrum in the FCC's 2006 AWS (advanced wireless services) auction along with Sprtint, which got bought out by the other four in 2007, and Cox, which dropped out in 2009 but took its spectrum with it. Verizon is offering $3.6 billion. It has also struck a deal to buy that spectrum for $325 million. Verizon has not yet filed its application for the Cox purchase, though it will likely make similar arguments.
Andrew Schwartzman of Media Access Project took issue with framing the deal as a simply spectrum addition. "No matter how forcefully Verizion claims that this is 'a spectrum only transaction,'" he said, "it is much more than that. The FCC's mandate is to look at the totality of the circumstances to decide if a proposed transfer is in the public interest. This one raises serious questions about the state of competition in both the wireless and video markets."