Verizon Wireless could make good on its promise to get 4G wireless broadband to rural America.
The nation's largest wireless provider is in talks with rural wireless operators to expand its 4G network to consumers in hard to reach areas of the country, The Wall Street Journal reported Wednesday.
Verizon is building its next-generation wireless network using $4.7 billion worth of spectrum it acquired in the Federal Communication Commission's 700MHz auction in 2008. Using a technology called Long Term Evolution, or LTE, the carrier hopes to be in 25 to 30 markets by the end of this year.
Verizon hasn't yet begun offering its service commercially, but it has tested it. A recent speed test conducted by the company in Boston recorded download speeds of 8.5Mbps. The uplink speed was about 2.8Mpbs. This is in line with Verizon's promise of speeds between 5 and 12 Mbps downstream.
Verizon executives had promised a year ago to get the 4G wireless broadband service to rural America. Tony Melone, senior vice president and chief technology officer for Verizon Wireless, told CNET during an interview at the 2009 CTIA tradeshow that Verizon's 4G network would blanket the entire continental United States, including the far corners of rural America.
"The licenses we bought in the 700MHz auction cover the whole U.S.," Melone said in the interview. "And we plan to roll out LTE throughout the entire country, including places where we don't offer our CDMA cell phone service today."
Melone didn't provide details of how Verizon would accomplish this goal, but the agreements with rural carriers might be one way to achieve this.
Verizon Wireless chief executive Lowell McAdam told the Wall Street Journal in an interview that Verizon is still negotiating the deal with rural providers. But he offered a few details of what the deals might look like.
For example, Verizon is considering licensing spectrum to local carriers for a small fee, who would then resell the 4G service to their customers. Customers of the local rural carrier would also be able to roam onto the rest of Verizon's 4G network, the article said.
It's not clear whether Verizon or the local carriers would install the equipment necessary in these rural regions, but The Wall Street Journal indicated this would be worked out in individual contracts.
These agreements would allow Verizon Wireless to expand its network coverage of the 4G service and it would provide a strong partner for rural carriers to allow them to also expand their offerings. McAdam told The Wall Street Journal that he doesn't expect the deals to make Verizon much money. But Verizon may be looking to score political points rather than increase revenue on these arrangements.
The FCC highlighted the importance of 4G wireless broadband services in its National Broadband Plan presented to Congress in March. This plan, which serves as a 10-year blueprint for getting broadband access to all Americans, recognized the importance of wireless as a way to bring broadband of any kind to U.S. residents living in hard to reach areas.
Under pressure to come up with some kind Net neutrality regulation, the FCC also recently said it would apply some old regulatory rules designed for the traditional telephone network on broadband companies.
Phone companies, such as AT&T and Verizon Communications, one of Verizon Wireless's parent companies, strongly oppose this measure. So far the FCC has not yet said whether new rules for Net neutrality or any old rules for telephony will apply to wireless broadband networks. So Verizon could be trying to score points with the FCC and other government officials who still haven't decided how wireless broadband should be regulated.
So far, the move has elicited a positive response from FCC officials.
"Bringing the benefits of mobile broadband to rural America is one the commission's top priorities," FCC Chairman Julius Genachowski and Commissioner Meredith Baker said in a joint statement Wednesday afternoon. "The news of Verizon Wireless plan to partner with rural providers to accelerate investment in 4G networks is very encouraging. Seamless universal connectivity is essential to economic growth and world-class technology leadership. We look forward to learning more about Verizon Wireless initiative, its successful implementation, and other examples of industry-led innovation."
Verizon isn't the only wireless company working with rural carriers and others to bring wireless broadband to remote parts of the U.S. In a recent interview with CNET, Clearwire's CEO Bill Morrow also said that his company is talking with local wireless companies and governments to get 4G wireless service to rural Americans. Clearwire has partnered with Sprint Nextel and several other companies to build a competing nationwide 4G wireless network using a technology called WiMax. Clearwire's network is already commercially available in 32 markets.
"We are working with local governments and providers to see where there are synergies for us to bring together facilities and capital investment," he said. "For example, if you look at a rural area that isn't on the roadmap for coverage because it doesn't have the right density, we might collaborate with a local company or county agency."
Morrow said he couldn't comment further on specific plans because he said deals are still being considered and negotiated.