The spectrum, part of Verizon's 700 mhz B block, which it isn't using itself, will likely be used by AT&T to further augment its 4G LTE deployment as it looks to strengthen and broaden its coverage. As part of the deal, AT&T will give up a few wireless licenses covering select western markets.
The deal is part of Verizon's promise to regulators that it would make available its 700 mhz B block spectrum as a condition to acquiring a larger swath of spectrum from the cable providers.
AT&T, meanwhile, has gone on a shopping spree to augment its own spectrum position, scooping up small assets around the country. The carrier on Tuesday said it would buy the U.S. retail operations of Atlantic Tele-Network for $780 million, largely for its spectrum assets.
With wireless use growing exponentially, the carriers have been busy shoring up their spectrum position, which gives them the capacity to continue delivering services without disruption or bandwidth traffic jams. T-Mobile USA and MetroPCS, for instance, are merging in an effort to combine their spectrum for better service for both of their customer bases.
AT&T CEO Randall Stephenson said on a conference call yesterday that he feels "good" about the company's spectrum position.
The deal covers 39 licenses and multiple markets. In exchange, Verizon will get AWS spectrum covering markets such as Los Angeles, Fresno, Calif., Phoenix and Portland.
Separately, Verizon agreed to sell a small part of its 700 mhz B block spectrum to Grain Management, a private equity firm based in Sarasota, Fla., that invests in telecommunications companies, for $189 million. Verizon will also pay Grain Management for the use of AWS spectrum that Grain acquired from AT&T.