Approve Our Cable Deal and We'll Sell Two Swaths of Spectrum, Verizon Tells FCC

In what could be perceived as a veiled attempt to push through its proposed $3.6 billion acquisition of wireless spectrum from a consortium of cable companies, Verizon on Wednesday announced plans to sell two large swaths of spectrum that operate on different radio frequencies.

Verizon said that it plans to sell all of its 700 MHz A and B spectrum licenses in order to “rationalize its spectrum holdings.” However, the sale of the licenses is contingent on the close of its proposed deal with SpectrumCo, an entity jointly owned by Comcast, Time Warner Cable and Bright House Networks, which has agreed to sell the carrier its stockpile of Advanced Wireless Services (AWS) spectrum licenses.

Rival carriers T-Mobile and AT&T have argued that Verizon's proposed deal with the cable companies would impede competition by placing an already dominate carrier in an even more dominant position, and have asked the FCC to block the transaction.

By offering to sell its 700 MHz A and B spectrum licenses, Verizon may be attempting to quiet the argument that it would maintain too many airwaves if the SpectrumCo deal is approved. In essence, Verizon is offering to trade two less valuable swaths of spectrum for a series of licenses that will allow the company to further build out its 4G LTE network.

In an earlier filing to the FCC, Verizon argued that “skyrocketing demand” for bandwidth-hungry data services will eventually “overtake its 4G LTE capacity absent additional spectrum resources, which it needs to secure now given that it faces spectrum constraints in its network in some areas as early as 2013 and in many more by 2015.”

Molly Feldman, Verizon Wireless's VP of Business Development, said that the company will ensure that the A and B spectrum licenses are sold “quickly and fairly” to help “benefit other carriers and their customers.”

“Since wireless operators, large and small, have expressed concern about the availability of high-quality spectrum, we believe our 700 MHz licenses will be attractive to a wide range of buyers,” she added.

The spectrum licenses that Verizon is offering cover major metropolitan areas like New York, Washington, Philadelphia, Chicago, Dallas, Houston, Los Angeles and Miami, according to the Wall Street Journal.

Now we must wait to see if the FCC – and rival carriers – react positively to Verizon's good faith effort.