X

Connect (X)

Tag Archives: AT&T

Verizon Wins Bidding Contest to Buy Straight Path

May 11, 2017 —

By J. Sharpe Smith

Senior Editor, AGL’s eDigest —  

Verizon Communications will acquire Straight Path for $3.1 billion outbidding AT&T for the firm which holds 133 licenses in the 28 GHz band and 735 licenses in the 39 GHz band.

Consequently, Straight Path also announced the termination of its merger with AT&T and Switchback Merger Sub, dated April 9, 2017. AT&T had bid $1.6 billion or $95.63 per share for Straight Path. The Straight Path board of directors had determined that the Verizon deal was a superior proposal to the AT&T merger agreement, which was not amended in light of the competing bid. Verizon will pay, on behalf of Straight Path, a termination fee of $38 million to AT&T.

According to MoffettNathanson, Verizon’s initial bid of $1.8 billion was raised to $2.3 billion before it landed at $3.1 billion, an increase from $0.009 per MHz-POP up to $0.017 per MHz-POP. The firm pondered the sudden rise in value of this formerly relatively obscure spectrum band.

After analyzing spectrum in the 28 GHz and 39 GHz bands, MoffettNathanson discovered that the owner of Straight Path and its spectrum would have “all the leverage in working with the FCC to repackage the spectrum for an upcoming auction.”  Until that auction is held, Straight Path’s spectrum will be the only usable 39 GHz licenses on the market, the firm added.

Verizon’s acquisition of Straight Path for $184.00 per share in Verizon stock represents a premium of 486 percent to the closing price of Straight Path common stock of $31.41 on January 11, 2017.

In spring 2016, Verizon purchased XO Communications, whose wireless spectrum includes 91 licenses of LDMS (local multipoint distribution system) spectrum in the 28-31 GHz range and 10 licenses in the 39 GHz band.

Evercore served as exclusive financial advisor to Straight Path and Weil, Gotshal & Manges LLP served as company counsel on this transaction. Debevoise & Plimpton LLP served as counsel to Verizon on this transaction.

Verizon Emerges as the Challenger for Straight Path’s 5G Spectrum

April 27, 2017 — 

By J. Sharpe Smith

Senior Editor, AGL eDigest

J. Sharpe SmithReuters broke the story this week that Verizon Communications is indeed the mystery bidder that made it a $104.64 per-share all-stock buyout offer for a company called Straight Path, which topped AT&T’s $95.63 per share earlier this month. The deal would work out to about $1.8 billion versus the $1.6 billion ponied up by AT&T.

Straight Path, which holds a nationwide portfolio of mmWave spectrum, including 133 licenses in the 28 GHz band and 735 licenses in the 39 GHz band, has been rumored as a takeover target. Especially after the FCC told it to sell all of its licenses or be fined $100 million, after it did not build out its network. If the deal goes through, the U.S. government will get 20 percent of $1.8 billion, or $360 million.

As carriers moved to secure their footing for the 5G push, XO Communications and Fiber had been snapped up rather quietly. No so with Straight Path. The reason for the bidding war is not a dearth of long-term spectrum opportunities, according to Craig Moffett, MoffettNathanson.

“It’s hard to see the bidding war for Straight Path as anything other than a timing hedge against a delayed millimeter wave auction from the FCC,” he said in an email. “There will ultimately be a ton of this spectrum coming to market. But after a disappointing incentive auction, there is a real chance that the FCC decides to wait a while before moving forward with what would be another big bite for the wireless operators’ stretched balance sheets.”

Last July, the FCC wrote spectrum holdings policies for the 28 GHz, 37 GHz, and 39 GHz bands that will facilitate license acquired through auctions and the secondary market.

In 2018, FCC plans to auction 200 MHz of 28 GHz spectrum in small markets, 450 MHz of 39 GHz spectrum in small markets, and 1,000 MHz at 37 GHz nationwide, according to the April 18th Equity Research “5G Trials – What We’ve Learned Thus Far,” published by RBC Capital Markets.

A Short History of 5G Spectrum

The FCC anticipated increased interest in using the millimeter wave spectrum back in 2003 when it established service rules to promote non-Federal Government development in the 71-76 GHz, 81-86 GHz and 92-95 GHz bands on a shared basis with Federal Government operations (FCC 05-45).

Last year, in July, the commission went further to create a 5G spectrum sandbox, where wireless hopes to play. In several bands, the FCC sought to create service rules for 5G services where satellite companies are a big player, along with a ton of federal use. Among the rules changes, mobile use was allowed on some satellite spectrum, wide bands were created and unlicensed rules were authorized. adopting a band plan that included mobile use, flexible use, unlicensed, and sharing policies in the bands while protecting existing federal users

In the 27.5-28.35 GHz and 38.6-40 GHz bands, mobile use was authorized, and a band plan was created for commercial operations between the 37 and 39 GHz bands. Additionally, operations in the 64-71 GHz band were authorized under Part 15, similar to the adjacent 57-64 GHz band.

Rules were created to allow satellite companies to use their spectrum for terrestrial use. Broadcasting and broadcasting-satellite service allocations were deleted from the 42-42.5 GHz band (42 GHz band) and it declined to allocate the band to the fixed-satellite service (space-to-Earth). Remember, later in the year, in December, the FCC changed the rules to allow Globalstar to use its satellite spectrum for a low-power terrestrial broadband network in the licensed spectrum at 2.4 GHz.

Mobile operating rights were granted to existing Local Multipoint Distribution Service in the 1,300 megahertz of spectrum in the 27.5 GHz to 31.3 GHz band, as well as for the 39 GHz band licensees,

5G Trials

Initial 5G implementations in the U.S. generally will fall within the 24-25 GHz, 28 GHz, 37 GHz, and 39 GHz bands, and to a lesser extent, 3.4-4.2 GHz, according to RBC Capital Markets, and the United States plans to propose spectrum bands including 27.5-29.5 GHz, 37-40.5 GHz, 47.2-50.2 GHz, 50.4-52.6 GHz and 59.3-71 GHz at ITU’s World Radiocommunication Conference in October 2019.

To figure out which carrier will use which spectrum out of all these possibilities, look at the 5G trials that are currently underway. Verizon’s trials have used frequencies between 28-40 GHz for high-capacity fixed access, and AT&T’s are frequencies between 3.4 GHz to 4.2 GHz, which are more suited toward mobile, according to RBC Capital Markets.

While silent on the licensed spectrum front, T-Mobile has petitioned the FCC for an experimental license in the 3550-3700 MHz band to test wave propagation characteristics “new innovative services.” The carrier wants to test 10 equipment prototypes in outdoor and indoor setting prior to equipment certification.

The Battle with AT&T, Time Warner and the FCC Rages on

By Ernest Worthman

Executive Editor, Applied Wireless Technology

 In spite of all the attention, much of which is negative, AT&T and Time Warner seem bent on joining at the hip. So, like all good corporate citizens, these two players are going to try an end-around that might just leave the FCC out in the cold.

Mergers of this nature generally have to receive regulatory approval from both the U.S. Department of Justice and the FCC. However, there is a loophole. The FCC only gets involved when communications licenses are transferred between two organizations. AT&T has stated that the licenses would still remain in the Time Warner business, as part of the wider AT&T group, effectively skirting the FCC’s role in the process. Regulatory approval would still have to be sought from the U.S. Department of Justice though. But in theory, if the loophole holds true, the deal might be able to go ahead without the FCC getting involved.

That is a big win for AT&T/Time Warner because the DoJ is purely a legal organization and one thing AT&T and Time Warner have is the best legal beagles money can buy. So chances are pretty good they can out-maneuver the best that the DoJ has to offer.

However, even with the FCC ousted, these two players still have to deal with the fact that the politico is not a big fan of this. There is a fair amount of talk on Capitol Hill that such a merger will create a conglomerate with too much power and control in the media and wireless segments. This editor happens to agree with that position.

The outcome here is still murky, even if the FCC is trumped (no pun intended). The real game now is legal and political. It remains to be seen exactly where this will end up. But if AT&T/Time Warner win, unregulated, that will not likely fare well for the future of competition in the MNO biz.

AT&T Makes Major Statement on 5G Plans

January 12, 2017

By J. Sharpe Smith

Senior Editor, AGL eDigest

J. Sharpe SmithIn terms of 5G announcements, this year is starting off where 2016 left off only this time it was AT&T setting the tone. But instead of the Mobile World Congress, the venue was the Consumer Electronics Show in Las Vegas.

AT&T announced its “5G Evolution plans for 2017 and beyond,” highlighting initiatives in LTE, 5G and fiber. The road to 5G includes continued deployment of LTE Advanced, achieving peak theoretical speeds of a gig at some cell sites in the next year through three-way and four-way carrier aggregation. Look for a 5G video trial with DirecTV in Austin, Texas, late in 2017. And the carrier said it is offering gigabit connections on its fiber network at nearly 4 million locations across 46 metros nationwide.

John Donovan, chief strategy officer and group president, Technology and Operations, emphasized that the carrier is not waiting for final standards to move forward on 5G trials, which he expects will “lay the foundation for our evolution to 5G.” The carrier wants to avoid falling behind in 5G development, according to Joe Madden, principal analyst, Mobile-Experts.

“The culture of AT&T and Verizon is different,” Madden said. “Verizon is making lots of announcements about their deployment of a network, while AT&T has spent more time focused on partnerships and acquisitions of video content. They want to purchase Time Warner and they merged with DirecTV to consolidate the market for video content.”

On Jan. 3, AT&T joined Qualcomm and Ericsson to announce trials using 3GPP’s 5G New Radio specifications in the 28 GHz and 39 GHz bands.

“AT&T has been a little quiet about [28 GHz and 39 GHz]. Their access to that spectrum is a big question mark right now,” Madden said. “Verizon has spectrum in those bands from the purchase of XO Communications, and I have been expecting AT&T to acquire a company with licenses in those bands. It hasn’t happened so far.” One possible candidate for purchase is Straight Path Communications, which has several licenses at 39 GHz, he added.

AT&T also said it plans to expand its multi-dwelling unit fixed wireless point-to-point millimeter wave trial in Minneapolis that it announced in October 2016. Madden stated that fixed video will be a priority in 5G for some time to come.

“Broadband virtual reality is sexy and fun but basic video entertainment is driving the bulk of the capacity needs right now and it is what is going to drive future demand,” he said. “In the higher spectrum it gets very expensive to deploy all the base stations to feed service indoors. That’s problematic and we don’t have access to spectrum below 6 GHz yet to penetrate buildings.”

Later this month, AT&T will be in Park City, Utah, looking for ways to grow its entertainment lineup as the official Multichannel Video Programming Distributor sponsor of the 2017 Sundance Film Festival.

“AT&T’s culture is to get the product that everybody wants to stream and then figure out how to deliver it later,” Madden said “Verizon’s taken the approach of figuring out the network and get the content later.”

Eventually, AT&T will eventually deliver the video over fiber, LTE and 5G, Madden said. “The only question is how they prioritize upgrades to their LTE network, the development of the 5G network and the fiber network,” he said. “AT&T’s focus so far has been on fiber and LTE, while Verizon has concentrated on fiber, LTE and 5G and less on content.”

How AT&T prioritizes its comm-infra buildout may become a little less easy to discern in the future, according to Jennifer Fritzsche, Wells Fargo senior analyst, because the line between wireless and wireline has become so blurred.

“On January 25th when [AT&T] reports Q4 and offers its 2017 outlook, it will likely give ONE capex number,” she wrote recently. “The days of breaking out wireless vs. wireline capex are gone. Why? Are they hiding something? Is it some conspiracy against the towers? No…. not at all, in our view. It is just to separate the two may be nearly impossible because the spending curve today is morphed together in an incredible way, with fiber at the base of it.”

xRAN – Coming To a Network Near You

November 10, 2016 — 

By Ernest Worthman

Executive Editor, AGL Small Cell Magazine

    Those of you who read what I write from time to time know that I like to call the IoT the IoX – for the internet of anything/everything. I like that acronym for a couple of reasons. One because it encompasses the many different renditions of this new ecosystem; internet of many things, industrial internet of things, internet of your things, internet of medical things, and so on. Most of these are just the brain children of the “internet of marketers” trying to carve out a niche that they can use to leverage their particular interest.

The other reason is that the letter “x” is kind of the de facto symbol for “anything.” So using the term the internet of anything/everything makes it much easier to talk about, well…anything and everything.

And sometimes others catch that too. For example, recently, Deutsche Telekom, AT&T and SK Telecom came together to present a different approach to promote radio access networks (RANs) that are software-based. This is a shift from today’s traditional highly proprietary RAN infrastructure. They call it xRAN – nice.

These players took advantage of the next-generation mobile network (NGMN) conference in Frankfurt to present this next-generation platform. It presents the potential to deploy network function virtualization and software defined networks versus the core network where most of the software deployment has been focused, to date.

The organization, called xRAN.org, is determined to implement open interfaces which can decouple the control plane and make use of the EnodeB base stations. This as an alternative to the existing closed, distributed control implementations on proprietary hardware. This new vector of extensible RANs will allow much better use of spectrum assets, as well as reduce opex and capex. And they can be implemented across many different networks.

xRAN looks like it will get legs. Intel, Texas Instruments, Aricent, Radisys all have shown support for it and several others are looking seriously at supporting it. If xRAN gets the traction, it has the potential to radically alter the mobile network landscape of how these networks are built and managed.