Verizon Wireless will need to sell valuable high-speed spectrum in 12 markets to complete a controversial $3.6 billion deal with a Comcast-led group of cable companies, a source close to the process said.
The sale, if agreed to by Verizon, could allow T-Mobile USA a chance to acquire this spectrum, making it a more viable competitor to AT&T and Verizon.
Washington regulators are reviewing the December Verizon-Comcast agreement, and while they will not be making any final recommendations for more than a month, they have made their initial intentions clear, the source said.
A second source warned such early leanings could change.
Verizon, in the proposed deal, would buy unused, national AWS-1 spectrum, used principally for smartphones, from the cable providers that also include Time Warner Cable and Bright House Networks.
Presently, Verizon is a dominant owner of AWS spectrum in the Washington to New York City corridor, and that is likely where it will need to shed AWS spectrum, the source noted.
Nationally, Verizon provides 4G cellular service through its 700 MHZ national footprint, and that spectrum is compatible with AWS.
T-Mobile, meanwhile, has invested only in AWS, and there is little AWS available outside of this sale to give it a national AWS footprint.
“T-Mobile has made no secret it is on the warpath for AWS spectrum,” a telecom source said.
Regulators prevented AT&T from buying T-Mobile, claiming the country needed a strong third cellular provider.
Besides the spectrum purchase, the Verizon deal includes a partnership agreement.
Nine New York state mayors, including those in Albany and Syracuse, wrote to regulators last week objecting to that pact.
Verizon, Comcast, DOJ and FCC spokespeople declined comment.