Verizon offers to sell some airwaves in exchange for approval to buy others

Verizon Wireless offered to sell some unused airwaves in exchange for federal approval of its purchase of other airwaves from cable companies. Verizon said it would sell some spectrum licenses in the 700 megahertz band that it bought at a federal auction in 2008 during which the Federal Communications Commission placed "open access" requirements on the spectrum. (The requirements were added to auction terms at the behest of Google.)

The sale is meant to appease regulators who are reviewing whether Verizon will have too much dominance in the wireless industry if it were also to buy AWS airwaves from SpectrumCo, a consortium of cable giants including Comcast and Time Warner Cable. The airwaves Verizon said it would sell, in the A and B portion of the 700MHz band, are not being used for its deployment of LTE 4G services. The A and B block licenses cover dozens of major cities and “a number of smaller and rural markets.” Verizon Wireless didn’t immediately say whether the A and B block licenses it owns cover fewer areas than the AWS licenses it wants to buy from cable firms.

Public interest groups reacted negatively to Verizon's announcement for varying reasons. Public Knowledge legal director Harold Feld said in a statement that "there is less than meets the eye" to the announcement, since even if the proposed sale takes place, there will still be a "cartel" extant in which Verizon will still "rule the air for wireless broadband" and cable will remain the only option for landline service. Feld accused Verizon of using "the mere offer" of a sale to entice regulators into approving the deal. But even when spectrum changes hands, Feld said, history shows that AT&T buys Verizon's spectrum and visa-versa, giving consumers no new options. Even if AT&T were barred from bidding, Feld said any other entrant would only "marginally" increase capacity.
"[T]he gap between the biggest companies and the rest of the industry would grow and the competitive world would shrink even more. Consumers would again be the losers,” Feld said.

Free Press research director Derek Turner said the announcement shows previous statements by Verizon that it wasn't hoarding capacity to be untrue. The announcement "demonstrates that Verizon has in fact warehoused spectrum," Turner said.