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Verizon Gets Coy About TV Spectrum Auction Role

Whether it's a pre-auction negotiation tactic or a true change of direction in its spectrum strategy, Verizon offered strong hints this week that it won't let itself "be held hostage by anyone for any part of the spectrum."

At the 2015 Wells Fargo Securities Technology, Media & Telecom Conference, Verizon CFO Fran Shammo insisted that his company has not yet decided how or if it will participate in the FCC's upcoming broadcast spectrum incentive auction for frequencies in the 600 MHz band.

"The FCC has told the broadcasters what they should expect out of the auction," he said, referring to last month's "price list" of opening bid sums for the auction.

"The broadcasters are now going through their own models to decide whether they are going to actually join into the auction," Shammo said. "As a carrier, we actually don't even know what's going to be auctioned off until they get through that process ...[possibly] in mid-January."

He said that the 600 MHz spectrum is "very good for coverage, not so good for capacity," suggesting that Verizon is less interested in the reach of the signals than in the amount of data it can deliver in densely populated areas.  That's an indicator of Verizon's focus on hefty spectrum services, such as video.

"There are very complicated rules around this spectrum," he pointed out, adding that after the process is clarified, "then we will decide what areas we may be interested in. ... There may be some areas ... where we could be interested to do fill-ins" for the 700 MHz spectrum that Verizon recently acquired. "It's not that [the 600 MHz band] is not usable with our spectrum, but it would just be ... a little bit more costly to deploy because there's a lot of interference between 600 and 700."

"So we'll just have to wait to see where it comes out," Shammo said. "For us, it would be nice to have, but not an actual priority for us like AWS-3 was." He reminded the Wells Fargo audience that Verizon walked away from the AWS-3 auction when the price got "way too high" in Chicago and New York.

As alternatives to the broadcast spectrum, Shammo said that Verizon "can continue to densify with our small cell technology."

"There's a lot of technology out there that the manufacturers are working on that gives you more capacity and makes your spectrum even more efficient to use," he said.  He also noted that "unlicensed is maturing," emphasizing that Verizon has access to LTE-U (long term evolution-unlicensed frequencies) and other unlicensed spectrum.

"Of course, we are working with the FCC because there's a lot of consternation that there's too much interference," he said, adding that, "unlicensed LTE actually helps the interference, not hurt the interference."

In response to a question about whether Verizon would be interested in buying the spectrum that Dish has acquired for terrestrial use, Shammo said that “[Dish chairman Charlie Ergen]’s got great spectrum, but not at the price he paid for it."

"I’m not interested in Dish.”