Is a Spectrum License Land Grab in the Offing?

Last week Verizon Wireless and the cable consortium known as SpectrumCo announced a $3.6b deal for AWS licenses covering 259m POPs; that deal implied a more than 50% increase in the value of the subject licenses since the 2006 FCC auction. This week, Verizon is back at the table, acquiring $360m worth of PCS and AWS licenses from Leap Wireless and Leap affiliate Savary Island. In exchange, Verizon is selling 12 MHz of 700 MHz spectrum covering nearly 11m POPs in Chicago to Leap, for $204m. Both deals indicate a healthy increase in spectrum values—which doesn’t come as a surprise given the growing popularity of mobile broadband services and the carriers’ race to deploy 4G LTE service. I also see AT&T’s March announcement that it would (attempt to) acquire T-Mobile as well as AT&T’s December 2010 deal for $1.2b in Qualcomm spectrum as catalysts that prompted Verizon to start shopping more seriously. It’s potentially the beginning of a real land grab for spectrum licenses; those who 'have' will benefit from the major projected increase in mobile broadband use, and those who ‘have not’ could well be left behind. Those who 'have and sell' might earn a nice return today, but that leaves open the question of how to participate in the coming hockey stick growth pattern. The good news is that it seems much of the long dormant AWS spectrum is going to emerge from its cocoon, providing options for ILEC license holders.