Verizon Wireless said it will sell spectrum licenses that could be worth billions if it is able to close deals to buy unused airwaves from cable companies, Bloomberg reports.
The story reports: “The largest U.S. wireless carrier plans to conduct an open sale process for all of its 700 megahertz A and B spectrum licenses, covering dozens of major cities across the U.S. and smaller markets, according to a statement today from the Basking Ridge, New Jersey-based company. Verizon Wireless paid $4.7 billion for the spectrum, according to JPMorgan Chase & Co.”
The proposed sale is contingent on Verizon’s closing of a pending $3.6 billion purchase of airwaves from a group including Comcast and Time Warner Cable and separate deals with Cox and Leap Wireless International, the story notes.
Bloomberg adds: “Opponents have said the accord with the cable group, which needs approval from the Federal Communications Commission, would result in less competition and higher prices.”
Analyst Walt Piecyk of BTIG commented for the report: “This is a reflection that their approval process is not going well. Investors have underestimated the challenges that Verizon faces at the FCC.”
The report notes: “Verizon Wireless and the cable companies also agreed to market one another’s services, an arrangement that the Justice Department is looking into.”