Looking to add more heft to their
wireless business, three major cable companies have sold off a significant portion of their advanced wireless spectrum business to Verizon Wireless for $3.6 billion.
The companies -- which include three cable partners, Comcast Cable, Time Warner Cable, Bright House Networks, under a joint operating company SpectrumCo -- also announced "the cable companies will have the option of selling Verizon Wireless' service on a wholesale basis" as part of the agreement.
The deal covers 122 licenses, reaching 80% of U.S. homes. The three cable companies bought this spectrum from the Federal Communications Commission auction in 2006 for $2.4 billion.
Comcast owns 63.6% of SpectrumCo and will receive approximately $2.3 billion from the sale. Time Warner Cable owns 31.2% and will receive approximately $1.1 billion, while Bright House Networks owns 5.3% and nets approximately $189 million.
Neil Smit, president of Comcast Cable, stated that these agreements, "together with our Wi-Fi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services."
The cable companies and Verizon Wireless have also formed an innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services.
New wireless spectrum has been a hot topic for federal regulators, who have increasingly asked TV broadcasters to share or sell some of their spectrum for new mobile business growth.
A bill is moving through Congress giving the FCC the authority to pay broadcasters for voluntarily exiting the spectrum to be auctioned for broadband use, setting aside as much as $3 billion to compensate broadcasters.