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Verizon rebuts spectrum warehousing claims

Fri, 06/15/2012 - 2:48pm
Maisie Ramsay, Wireless Week

Verizon Wireless continues its effort to convince the FCC to approve its $3.9 billion purchase of AWS spectrum as the clock ticks down on the deal.

A regulatory affairs executive and a member of its legal team met with wireless bureau chief Rick Kaplan this week to rebut claims that Verizon will hoard the spectrum instead of using it for LTE, according to documents filed Thursday.

"To the extent some parties nonetheless continue to claim that Verizon will warehouse this spectrum instead of using it to serve customers or that build-out conditions should be imposed, those claims are baseless," Verizon stated.

Verizon holds a substantial amount of unused AWS spectrum spanning the eastern half of the country. The licenses were acquired at auction in 2006 but have yet to be put to use.

The AWS licenses it is working to purchase from Cox Communications, Comcast, Time Warner Cable and Bright House Networks cover 94 percent of the U.S. population and will substantially increase Verizon's AWS holdings.

T-Mobile USA, one of the most vocal opponents to the AWS transaction, has repeatedly cited the unused spectrum as evidence that Verizon is warehousing its spectrum.

"The instant transactions would add even more AWS spectrum to Verizon Wireless’ unused spectrum inventory," T-Mobile said in an April filing with the FCC.

Verizon’s Kathleen Grillo, senior vice president of federal regulatory affairs, and Mike Glover, senior vice president and deputy general counsel, argued in their Tuesday meeting with Kaplan that "Verizon needs this spectrum to meet its customers' near-term needs."

Verizon has said it could run into capacity constraints as early as next year in some markets without additional spectrum.

The executives said that "Verizon intends to deploy the AWS spectrum promptly, beginning in 2013," and they continued to insist there is "no reason for build-out or related conditions."

Verizon has offered to sell off its 700 MHz lower A-block and B-block licenses if the AWS sale goes through. T-Mobile has dismissed the importance of the offer, claiming the spectrum has too many problems with interference to be worth buying.

If the AWS transaction is approved by the FCC, Verizon said it will use the spectrum to increase the capacity of its LTE network, currently running in its upper 700 MHz holdings.

Verizon expects to receive FCC clearance for the AWS sale by late summer. The operator announced last December it was buying the AWS licenses from Cox Communications, Comcast, Time Warner Cable and Bright House Networks.

The transaction has come under criticism by competitors who say it will contribute to the consolidation of spectrum in the hands of too few providers. Marketing arrangements signed at the same time as the spectrum sale have also come under scrutiny, with some lawmakers questioning whether they amount to a truce between former competitors.

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