Verizon to sell spectrum; consumer groups oppose

Verizon announced Wednesday that it would conduct an "open sale" of spectrum licenses covering dozens of cities nationwide, plus many smaller and rural markets. The announcement comes amid growing opposition to Verizon's proposed purchase of spectrum from a consortium of cable companies.

Verizon bought licenses to the spectrum in a 2008 auction during which the FCC placed "open access" requirements on the spectrum that would trigger once a certain price was reached. The requirements were added to auction terms at the behest of Google.

Google subsequently placed high enough bids on the spectrum to trigger the open access requirement, but didn't make any further attempts to actually win the auctions.

Public interest groups reacted negatively to Verizon's announcement for varying reasons. Public Knowledge legal director Harold Feld said in a statement that "there is less than meets the eye" to the announcement, since even if the proposed sale takes place, there will still be a "cartel" extant in which Verizon will still "rule the air for wireless broadband" and cable will remain the only option for landline service.
Feld accused Verizon of using "the mere offer" of a sale to entice regulators into approving the deal. But even when spectrum changes hands, Feld said, history shows that AT&T buys Verizon's spectrum and visa-versa, giving consumers no new options. Even if AT&T were barred from bidding, Feld said any other entrant would only "marginally" increase capacity.

"[T]he gap between the biggest companies and the rest of the industry would grow and the competitive world would shrink even more. Consumers would again be the losers,” Feld said.

Free Press research director Derek Turner said the announcement shows previous statements by Verizon that it wasn't hoarding capacity to be untrue. The announcement "demonstrates that Verizon has in fact warehoused spectrum," Turner said.