As it struggles to expand its 4G LTE, AT&T is spending $1.9 billion in cash for unused spectrum from its biggest rival, Verizon. This upgrade will improve service for some 42 million people in 18 states thanks to an additional 39 700MHz licenses. This bodes well for AT&T's ambition to offer 4G LTE to 270 million people by the end of the year.
This is important news because the AT&T/Verizon deal doesn't just benefit the two wireless carriers. It benefits everybody, and the FCC loves it. "After many frustrating years, wireless carriers have finally reached a voluntary industry solution that will resolve the lack of interoperability in the lower 700MHz band in the most efficient manner," acting FCC chairwoman Mignon Clyburn said in a statement. "This is a big win for consumers, especially in rural areas, who will see more competition and more choices. Also, by making it easier for small wireless carriers to compete, today's interoperability solution will spur private investment, job creation, and the development of innovative new services and devices."
To square up the deal, Verizon will receive advanced wireless spectrum (AWS) licenses in five markets from AT&T which expects to get $225 million worth of benefits. It's also worth noting that it only took eight months for AT&T and Verizon to finalize the purchase. Now that this little instance of cooperation is all taken care of, though, it's time for the two companies to head back to the battlefield. [AT&T, FCC]