AT&T acquires portion of 700 MHz for $2.5 billion

Published 9 October 2007

The 700 MHz spectrum is being vacated by TV operators, and telcoms — but also Google — vie for a portion of the valuable band; FCC to allocate portion of band for public safety

The nation’s largest phone company would obtain the spectrum from Providence, Rhode Island-based Aloha Partners, which holds licenses that cover 196 million people in 281 markets, including the 10 largest and 72 of the top 100. San Antonio-based AT&T said the move would give the company 12 megahertz of spectrum in the 700 MHz range. It may buy more in January, when the Federal Communications Commission (FCC) holds a major auction of additional 700 MHz spectrum. That portion of the airwaves has been used for decades by television broadcasters, but they are giving it back to the federal government as part of the requirement of a congressionally mandate that all TV broadcast eb digital by February 2009. In exchange for vacating the 700 MHz band, TV operators have been allotted other spectrum suitable for delivering high-definition TV signals.

The 700 MHz block of airwaves is especially valuable because signals can travel long distances and more easily penetrate walls and other obstacles. Networks which operate in the 700 MHz range are also less expensive to build than in other portions of the spectrum. Privately held Aloha was founded by wireless veteran Charles Townsend, who has started and sold several mobile carriers. The firm is also backed by billionaire Amos Hostetter, a renowned cable-TV pioneer who once served on AT&T’s board. Aloha began to buy 700 MHz airwaves in federal auctions in 2001 and 2003, supplementing its holdings with additional purchases in later years. The firm paid just a few hundred million dollars for its spectrum. Big phone companies such as AT&T and Verizon Wireless (VZ:verizon communications plan to use the 700 MHz spectrum to deliver TV and video to mobile-phone users. Even industry outsiders such as Google are looking at whether to bid for some of the 700 MHz spectrum. AT&T said it expects to close the deal within six to nine months.

The FCC said it would allocated a portion of the 700 MHz spectrem to a dedicated public safety network.