Cable Operators

Cox To Sell Wireless Licenses To Verizon Wireless For $315 Million

12/16/2011 11:09 AM Eastern

Cox Communications has joined three of its cable peers in the Verizon Wireless camp, announcing Friday that it has struck an agreement to sell to the wireless carrier its 20-MHz Advanced Wireless Services spectrum licenses covering 28 million people in the U.S. for $315 million.

In addition, Cox and Verizon Wireless will also become agents to sell each other's residential and commercial products and services through their respective sales channels. Over time, Cox may have the option to sell Verizon Wireless' services on a wholesale basis.

The deal comes two weeks after Comcast, Time Warner Cable and Bright House Networks entered into a similar arrangement with Verizon Wireless. Under that deal, the cable operators will sell 122 AWS licenses to the wireless carrier for $3.6 billion, and the MSOs and Verizon Wireless will market each other's products and services.

Cox noted that the agreement with Verizon Wireless does not include Cox's 700 MHz spectrum licenses, the company's existing Cox Wireless customer accounts -- which will be phased out by March 2012 -- or any other assets.

"These agreements provide Cox customers with key enablers to mobility, such as access to Verizon Wireless' 4G LTE network and iconic wireless devices," Cox president Pat Esser said in a statement. "We look forward to the many benefits this will bring to customers."

As part of the deal, Cox expects to enter into arrangements with the Philadelphia-based "innovation technology joint venture" to be formed by Verizon Wireless, Comcast, Time Warner Cable and Bright House, aimed at developing ways to better integrate wireline and wireless products and services.

Originally, Cox was part of the SpectrumCo joint venture with Comcast, TWC, Bright House and Sprint Nextel. In January 2009, Cox sold its 10.9% stake back to the JV for approximately $70 million in cash. Sprint sold its 5% interest in SpectrumCo in 2007.

Separately, in the Federal Communications Commission's 2008 auction of digital TV spectrum, Cox paid $304.6 million for 22 licenses in the 700-MHz band in California, Virginia, Georgia, Florida, Louisiana, Arkansas, Kansas and Oklahoma.

The Cox-Verizon Wireless deal is subject to approval by the FCC and review by the Department of Justice, as are the agreements among Comcast, TWC, Bright House and Verizon Wireless.

Privately held Cox announced last month that it would no longer sell its Cox Wireless service -- delivered via Sprint Nextel's 3G network -- but would continue to provide service to its wireless customers through March 30, 2012.

Previously, Cox had embarked on a strategy to build out its own 3G wireless networks in certain markets, but the MSO scrapped those plans in May 2011.

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