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Verizon jumps into OTT service; Sprint nixes spectrum auction

In telecom news, Verizon announces plans to launch an OTT service in 2015 while Sprint backs out of the FCC's November spectrum auction.

In telecom news, Verizon announced its intentions to offer an over-the-top (OTT) mobile television service aimed at cord cutters. Verizon is partnering with major content providers to offer the service, which will launch in mid-2015. Meanwhile, Sprint bowed out of the Federal Communication Commission's November spectrum auction. The mobile carrier instead will focus its efforts on the FCC's 600 MHz incentive auction set for mid-2015.

AT&T announced it will offer a broadband wireless and DirecTV bundle for rural customers. But first AT&T must clear the hurdle of getting the FCC's approval of its proposed acquisition of DirecTV.

Verizon plans mobile OTT service in 2015

Verizon plans to launch a mobile television service in mid-2015, CEO Lowell McAdam revealed at the Goldman Sachs Communacopia Conference last week.

The OTT service will offer mobile users a bundled service with major broadcast providers and an a la carte collection of custom channels, McAdam said. Verizon will leverage the service through its acquisition of Internet-based television platform OnCue and will offer integration between FiOS and wireless channels.

McAdam said content providers' attitudes toward streaming services have shifted in the past decade, moving from linear, television-only content delivery to embracing OTT.

McAdam said the OTT service is aimed at millennials who stream their entertainment over the Internet. "I don't think anyone would say the only way [entertainment will] be offered in five years is linear and tied to your TV set. They'll be left behind," he said.

The service is not to be confused with Verizon's LTE Broadcast, a one-to-many content delivery service, which will also launch next year.

Sprint bows out of spectrum auction

Sprint announced it will not participate in the FCC's November spectrum auction. Sprint is the only major mobile carrier to bow out of the auction of Advanced Wireless Service band (AWS-3) spectrum.

Sprint spokesman Jeffrey Silva confirmed to Bloomberg in an email that Sprint will not participate in the spectrum auction, but will "continue to evaluate the opportunities presented by the upcoming 600 MHz incentive auction."

AWS-3 is the band that falls between the 2155 to 2175 MHz spectrum range and is designed to accommodate smartphone data usage.

"Sprint really has a lot more spectrum than its rivals, so they don't have that pressing need to get more," John Butler, senior telecommunications analyst for Bloomberg Intelligence, said.

By participating in the auction, Sprint also ran the risk of exceeding the FCC's spectrum screen, which the agency uses to review spectrum deals. The FCC recently ruled that Sprint's 2.5 GHz spectrum fell under the spectrum screen, which Sprint had contested.

The AWS-3 spectrum auction is scheduled for Nov. 13, and the FCC expects to raise at least $10 billion.

AT&T preps post-acquisition wireless broadband, DirecTV bundle

AT&T will bundle satellite television and wireless broadband services as early as next year, provided the FCC approves AT&T's proposed acquisition of DirecTV.

Speaking at the Goldman Sachs Communacopia Conference, AT&T President and CEO Ralph de la Vega said the provider would dedicate spectrum in rural areas, where most of DirecTV's 20 million customers live. De la Vega said AT&T can install satellite dishes on customers' homes that can provide both television and broadband services.

De la Vega said AT&T could deliver download speeds up to 15 Mbps in rural areas with fixed wireless broadband. The speeds would be "significantly higher than what you're seeing today on LTE because it will be dedicated spectrum," he said.

DirecTV currently only offers pay TV services and relies on partnerships with Internet service providers for Internet, phone and video bundles.

AT&T proposed a $48.5 billion offer for DirecTV in May to better compete against providers such as Comcast. The acquisition is expected to be reviewed early in 2015.

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