Verizon used the prospect of selling lower-block 700MHz spectrum as a carrot to lure in the US government: it would share the wireless wealth only if it was cleared to buy cable company spectrum in the AWS bands. Now that the DOJ and FCC have greenlit the cable purchase, the carrier is living up to its end of the bargain. Verizon has just signed a related deal that sells B-block 700MHz access to Nortex Communications, a rural phone company operating northwest of Dallas. While it's not Verizon first pact for the lower 700MHz space, it's the first directly resulting from the carrier's promises during the AWS frequency grab and shows the company being true to its word. We're not expecting the Texas agreement to suddenly level the balance of power when Verizon wasn't even using those airwaves for LTE; still, it's good to know that the provider isn't waiting around to give smaller competitors a break.
First Lower 700 MHz Spectrum License Sale Agreement Inked with Nortex Communications
Nortex Communications, an independent telephone company based in Muenster, TX, has signed a purchase agreement with Verizon Wireless to acquire the Texas RSA 6-Jack 700 MHz lower B-block license which covers a four-county area northwest of Dallas, subject to FCC approval. The sale is the first to be signed as part of Verizon Wireless' previously announced plans to offer for sale its lower 700 MHz licenses to other interested parties.
Verizon Wireless decided last spring to explore the sale of the lower 700 MHz A and B Block spectrum it had acquired in FCC Auction 73 in 2008. Since the 700 MHz licenses cover numerous major cities as well as dozens of smaller and rural markets across the country, the sale process was designed to encourage a wide variety of potential buyers, small and large, to participate. The company moved forward with the sale process as soon as the FCC approved Verizon Wireless' acquisition of AWS spectrum as part of several transactions in August.
Although the sale to Nortex is the first to be signed as a result of the announced sale process, Verizon Wireless has previously sold 24 of its lower 700 MHz spectrum licenses to seven different telecommunications companies operating in thirteen states. Verizon Wireless is also getting spectrum into the hands of 20 rural operators through its "LTE in Rural America" program. The company is currently evaluating bids for its other lower 700 MHz spectrum licenses. All transactions will require appropriate regulatory approvals.
Stephens Inc., an independent financial services firm, and Loop Capital Markets LLC, a minority-owned full service investment bank, managed the offering process.