Verizon Gobbles Up Cable Companies' Wireless Spectrum For $3.6 Billion

Posted 12/02/2011 at 11:52am | by Brad Chacos

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Wireless spectrum: it’s what powers mobile communications and wireless carriers have an insatiable taste for more, more, MORE of it. The need for more spectrum is the reason Sprint keeps bailing Clearwire out of financial hot water and why AT&T is pushing so hard for a merger with T-Mobile. Verizon has pretty much been the only major carrier that hasn’t engaged in major spectrum-related deals this year – until now, that is. Today, Verizon announced it has reached a $3.6 billion deal to gobble up 122 spectrum licenses from three major cable companies.

Time Warner, Comcast and Bright House networks each own a portion of SpectrumCo, the company selling Verizon the spectrum licenses. The deal isn’t straight up cash-for-spectrum, either; Verizon Wireless and the cable companies will be able to sell each other’s products, too. In addition, CNET reports that both Comcast and Time Warner, who currently offer wireless broadband services that tap into Clearwire’s network, will be cutting ties with that company over the next six months and switching whole-hog over to Verizon’s network.

Verizon isn't being coy what it wants the spectrum for, either. "Spectrum is the raw material on which wireless networks are built, and buying the AWS spectrum now solidifies our network leadership into the future, and will enable us to bring even better 4G LTE products and services to our customers," CEO Dan Mead said in the press release.

Of course, the sale still has to be approved by the FCC, and if the FCC’s recent slap-down of the AT&T – T-Mobile merger is any indication, that approval may fall under heavy scrutiny by regulators.