Verizon Wireless to pay $3.6 billion for cable spectrum

NEW YORK ― Verizon Wireless plans to pay $3.6 billion for wireless airwaves from a venture of cable companies Comcast Corp., Time Warner Cable Inc. and privately held Bright House Networks.

The deal, which includes the option for cable companies to resell Verizon Wireless service, comes as Verizon’s biggest rival AT&T Inc is facing regulatory opposition for its proposed plan to buy T-Mobile USA.

Both Verizon Wireless and AT&T, the No. 1 and No. 2 U.S. mobile providers, are trying to improve their network capacity to support increased consumer demand for services such as mobile web browsing on devices like tablet computers.

Analysts said it made sense for Verizon to take the chance to get a deal done while AT&T is tied up with efforts to seek approval for its T-Mobile USA deal but some wondered why the cable operators did not wait.

“It looks like a great deal for Verizon,” said Pacific Crest analyst Steve Clement. “You’d think from the cable guys’ perspective if you wait a little longer there’s more bidders — potentially AT&T and maybe T-Mobile USA.”

Comcast said, however, that the deal represented a 64 percent premium over the $2.2 billion price the cable consortium paid in 2006 for the wireless spectrum being sold to Verizon Wireless.

Another analyst saw the development of a reseller deal with Verizon Wireless as a strategy about-face for the cable operators, which compete with Verizon and AT&T in home telephone, Internet and television services.

“The biggest surprise is that it aligns the cable companies with Verizon, one of their fiercest competitors,” said Mizuho analyst Michael Nelson. “The primary reason the cable companies formed this consortium and acquired this spectrum was to compete better with Verizon and AT&T.”

The cable operators already resell wireless services in some markets using the network of Clearwire Corp, their venture with No. 3 U.S. mobile service Sprint Nextel.