The recent deal in which SpectrumCo sold advanced wireless spectrum (AWS) to Verizon has been assailed by watchdogs as a move that severely weakens the prospects for competition in the wireless universe. In the case of SpectrumCo member Comcast, it represented an excellent utilization of spectrum it had won at auction and had no immediate plans to develop – in the form of a $2.3B payday.
The revelation that Comcast had no serious plans to actually use the spectrum came during a Citicasters investor conference. According to a Communications Daily reports, Comcast CFO Michael Angelakis said, “We never really intended to build that spectrum, so therefore it’s a really good use of that spectrum,” he said. “We always said the spectrum had to be financially optimized and strategically optimized and I think with Verizon we were able to do that.”
SpectrumCo was owned 63.6% by Comcast, 31.2% by Time Warner Cable and 5.3% by BrightHouse. Their respective benefit from the $3.6B sale to Verizon was $2.3B (as mentioned above) for Comcast, $1.1B for TWC and $189M for BrightHouse.
The cable companies will also have the chance to do business with Verizon going forward, making Verizon services available on a wholesale basis and joining in innovative joint ventures aimed at developing technology to improve integration between wireline and wireless services.
At the time of the sale of spectrum to Verizon, Comcast President Neil Smit stated, “These agreements, together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services. We’re excited about this partnership with Verizon Wireless and the future innovations we will bring to consumers.”
RBR-TVBR observation: The obvious question remains: Why the big rush to chase television stations off their current dial position when the companies that want to do the chasing are sitting on unused spectrum?