Verizon Pays $3.6 Billion To Increase Spectrum

    December 2, 2011

Verizon announced today that it was acquiring the 122 spectrum licenses previously owned by wireless company SpectrumCo, a failed venture co-founded by Comcast, Time Warner Cable, and Bright House Networks.

The deal gains Verizon an enormous chunk of wireless spectrum. Most of the bandwidth is expected to go toward the expansion of the company’s already impressive 4G/LTE mobile broadband network. Though the government is preparing to auction off large chunks of the spectrum that were left unused by the switch to HD television broadcasting, Verizon appears unwilling to take chances on losing out to other companies.

Some details of the deal remain somewhat obscure, as it appears that there are other aspects of the transaction than just the exchange of spectrum licenses for money. As part of the deal Verizon, Comcast, and Time Warner become agents for one anothers’ services, which may open the way for a variety of unique services, including the availability of Comcast and Time Warner content over the Verizon’s wireless broadband network.

This deal mirrors a similar acquisition by Verizon’s main rival, AT&T, which reached an agreement last December to purchase spectrum from Qualcomm. The FCC is currently reviewing that purchase, which is still awaiting final approval, in light of AT&T’s attempt to purchase T-Mobile.

Pending government approval, Verizon will pay $3.6 billion for the spectrum licenses, with each of the three companies being paid according to their ownership of SpectrumCo. Comcast will receive $2.2 billion, Time Warner will receive $1.1 billion, and Bright House will recieve $189 million.