Verizon Spectrum Deal Approved by FCC

"Welcome to my lair said the spider to the fly." That was my first thought upon reading that the FCC approved the Verizon purchase of spectrum from Comcast, Time Warner Cable, Cox Communications and Bright House.

Who are the winners and losers of this deal and why did I think of the spider and the fly? Let me explain.

In the short term the big cable companies get $3.9 billion for spectrum they really had no plans for. Verizon gets the spectrum but almost as important they:

A: Get partnerships with the biggest cable companies in the country who will now be selling Verizon's wireless products which will be utilizing that same spectrum they just bought from the cable companies. It's almost as if Verizon is Henry Winkler and the cable companies just agreed to buy a reverse mortgage from him.

B: This deal allows Verizon to ease out of their expensive copper based wireline business. Verizon knows this business is doomed anyway. Now they basically have the OK from the FCC not to sink any more money into upgrading DSL facilities. I would look for Verizon to quietly start to sell off small copper only properties on the edges of their footprint.

If Verizon does sell off some of their properties - it will be at bargain prices just to get out from the overhead. This will end up being a real value for the purchasing party which most likely will be non-union and have much lower operating costs. It may not have made business sense for Verizon to expand Fios into some of these areas but with lower overhead costs - these properties could turn a nice profit for smaller more nimble firms willing to upgrade the copper to fiber. Now all of a sudden the big cable companies who probably haven't done much but push Verizon wireless products in the interim will be faced with new competition who won't be burdened by awful customer service reputations.

The real loser in this deal is the CWA (Communications Workers of America). Most of their Verizon jobs are on the copper wireline side. It is sad to say but this spectrum deal is probably the death knell for most of those very same jobs.