AT&T buys 700MHz spectrum from Qualcomm

Purchase ups AT&T’s 4G spectrum portfolio

AT&T isn’t about to sit back and let Verizon become the undisputed king of 4G LTE networks.

Today AT&T announced that it would pay Qualcomm $1.925 billion for spectrum licenses on the Lower 700MHz band. AT&T says it will waste no time incorporating the spectrum into its 4G LTE network, which is currently being constructed and is due to launch commercially sometime next year. AT&T says that the spectrum will cover 300 million people nationwide and that 12MHz of the lower spectrum band will cover 70 million people in New York, Boston, Philadelphia, Los Angeles and San Francisco.

Verizon sets the bar for future LTE launches

The spectrum had previously been used by Qualcomm for its FLO TV mobile television streaming service, which will now be shut down in March 2011. Qualcomm had originally won the 700MHz spectrum licenses as part of a Federal Communications Commission auction back in 2003. The FCC would later auction off much larger pieces of the 700MHz band in 2008.

In the 2008 700MHz auction, Verizon came away as a big winner as it won licenses for the so-called “C Block” 22-MHz spectrum chunk that garnered significant attention when the FCC placed open-access rules on it mandating that future licensees would be prohibited from blocking or slowing Internet traffic from competing carriers using the network. The FCC also said the C-Block winner would have to allow any devices to connect to the network.

Verizon won C-Block licenses for every region in the United States except for Alaska. The company bid around $4.7 billion total for the rights to acquire its C-Block licenses, bidding $1.6 billion for the Mississippi Valley C-Block license and $1.1 billion for the C-Block license in the Great Lakes region. AT&T, meanwhile, won more than 150 licenses on the B Block of spectrum, which generally covers individual metropolitan areas throughout the United States. In total, the two carriers bid a combined $16 billion, accounting for more than 80% of the $19.6 billion in total bids.

Verizon launched its 4G LTE network commercially earlier this month and the carrier says it will be available in 38 major markets by the end of the year. Verizon plans to have its entire current 3G footprint upgraded to LTE by the end of 2013. Prior to Verizon’s launch this month, Sprint had been the only major carrier to offer 4G services in the United States, as its WiMAX network has been up and running commercially for more than two years. Along with AT&T, T-Mobile is expected to launch its own LTE services sometime next year.

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