NextWave Sells ALL Spectrum Licenses To Verizon Wireless

A major spectrum sale was announced today where Nextwave basically sold the company and its spectrum assets to Verizon Wireless for $3B with the explanation that the major wireless carrier simply has better distribution and scale to utilize the spectrum. But if that’s so, shouldn’t VZW simply have gotten the spectrum to start, instead of the FCC auctioning it to smaller rivals? It saddens us that Nextwave has had valuable public spectrum tied up since 1996 without providing any services to the US citizens (a required obligation for license holders). Techdirt has certainly had concerns over Nextwave’s operations: Mike, in June, speculated that they may never offer service, but instead just sell off their valuable assets. The sad thing is that we very much liked the Nextwave concept of a carrier’s carrier – one that would deploy a fast next-gen network and allow other companies to re-sell the network. We hoped a newcomer like Nextwave could act more quickly than the telcos, and leapfrog communications ahead a couple of years. AOL, Earthlink, Yahoo, the wireless carriers, could all have shared the next-gen infrastructure, thus lowering the costs of launching a new national network. One hoped that by selling off portions of their spectrum, Nextwave could gain the capital needed to build their network. But instead, the spectrum finally goes to one of the telcos we were hoping to leapfrog! The current announcement seems to suggest that Nextwave will continue operating as a company, though it is not clear how. Will they propose to operate a Next-Gen network for Verizon Wireless? Will that network be a carrier’s carrier network, and will other carriers be comfortable using a Verizon-owned infrastructure? That seems a lot like leasing a DSL line from a competing ILEC. Here’s the rundown of our Nextwave coverage. And for those of you with 5 minutes who want to learn how this whole mess started, here’s an article I wrote on these very same issues in 2001. Update: Hold on…it looks like Nextwave has sold only subsidiary holding companies that controlled their 1.9MHz licenses. The re-structured Nextwave will be solvent, and retain rights to 2.5GHz MMDS spectrum. More later.

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