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Verizon Wants FCC's Spectrum Screen Applied to Sprint, Clearwire Deal

Tue, 01/29/2013 - 2:40pm
Ben Munson

Verizon Wireless has joined the discussion on Sprint's potential acquisition of Clearwire, stating the FCC should apply its spectrum screen to the swath of 2.5 GHz airwaves Sprint stands to gain from the deal. If the FCC applies the screen and finds the deal could pose spectrum aggregation concerns, it could result in a limit to how much of Clearwire's spectrum Sprint is allowed to use.

In comments filed with the FCC, Verizon wrote about how Sprint has touted the value of Clearwire's spectrum as the primary benefit of the transaction. The company further stated the fact that the spectrum is already being used for a mobile network making it "suitable and available," the criteria that must be met by spectrum in order for the FCC to apply the screen.

Verizon used the FCC's approval of AT&T's plans for 2.3 GHz last year and that spectrum's subsequent addition to the screen after being deemed "suitable and available" as precedent for the 2.5 GHz in question, saying the commission should apply the same reasoning.

"Indeed, failure to add the BRS/EBS spectrum would arbitrarily depart from the rationale of a Commission order that is less than two months old," Verizon wrote in its comments.

Earlier this month, all four major providers weighed in on proposed modifications to the FCC's spectrum screen. In that spate of comments, T-Mobile cited a Qualcomm study stating that building out a mobile network above 2 GHz costs three times as much constructing one in the 700 MHz spectrum, primarily based on the increased number of base stations required to support the higher frequency. The claim seems to support Sprint's request that spectrum above 2 GHz be omitted from the Commission's screen.

Verizon's comments represent another hurdle in Sprint's quest to buy out Wi-Max provider Clearwire, a deal that will have big implications in helping finalize Softbank's bid to acquire 70 percent of Sprint.

Sprint's current bid of $2.97 per share to buy Clearwire--which was raised from its initial offer of $2.90--has come under heavy scrutiny from Clearwire's minority shareholders like Taran Asset Management and Crest Financial Limited, both of which have filed petitions to block the transfer.

Additionally, Sprint has been faced with Dish's counter-offer of $3.30 per share for Clearwire. Although recent reports have suggested Sprint will have to raise its current offer because of what Dish put on the table, the satellite TV provider has said it will not seek to block the transfer.

Mixed in with everything else is news now that the Department of Justice is seeking to defer the Sprint, Softbank deal while it conducts a national security review of the proposed deal.

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