The week before Christmas, the Federal Communications Commission approved wireless carrier AT&T’s $1.93 billion purchase of unused wireless spectrum from Qualcomm.
AT&T said a year ago that it planned to buy the spectrum to add capacity to its 4G network, which it has been rolling out across the country. The network’s higher speeds make it faster to load video and websites on phones.
Mobile technology company Qualcomm had used the spectrum for its Flo TV mobile television service, which it shut down because of weak customer interest.
The FCC said the purchase brings up some competitive concerns, but they can be eased by conditions the Commission outlined in its approval, including offering data roaming to competitors.
The approval came just days after Dallas-based AT&T, which runs the second-largest wireless network in the U.S., gave up on its $39 billion deal for smaller carrier T-Mobile USA following government concerns that the deal would raise prices and reduce competition.
The spectrum deal will help AT&T better compete with cell phone carriers Verizon Wireless and Sprint Nextel – the largest and third-largest wireless service providers in the nation, respectively. Like AT&T, Verizon is already deploying a network that uses LTE technology, and Sprint intends to use the technology, too.
And recently Verizon has been building out its share of airwaves available for its 4G network by making deals with several cable companies to buy airwave licenses. In December, Cox Communications, as well as Comcast, Time Warner Cable and Bright House Networks, all agreed to sell some of their spectrum to Verizon, and in exchange, Verizon will resell their cable services in its stores.
Qualcomm stands to make a handsome profit on the spectrum. It paid $38 million for one slice of nationwide spectrum – the former UHF channel 55 – in 2002, then another $558 million in 2008 for UHF channel 56 over New York, Los Angeles, Boston, Philadelphia and San Francisco.
Filed Under: Industry regulations