Oct 13, 2020

The Pentagon floats plans to create nationalised 5G network

Harry Menear
2 min
The Pentagon and the Federal Communications Commission’s plans to lease 5G frequencies to a private contractor could give the recipient a huge advantage
The Pentagon and the Federal Communications Commission’s plans to lease 5G frequencies to a private contractor could give the recipient a huge advanta...

The Trump Administration is pushing forward a plan to effectively nationalise a portion of the United States’ 5G networks. The move, which is deeply uncharacteristic of a Republican government which has expounded free market economic doctrines louder than the Reagan administration, has been met with criticism from the telecoms sector and Republican legislators. However, industry experts and legislators suspect that the move is being motivated by a desire to more effectively compete with China in the 5G arena.  

The proposal is currently underway at two different branches of the government: the Federal Communications Commission and the US Department of Defence

In September, the Pentagon released a Request for Information (RFI) to the private sector for insight into “innovative solutions and technologies for dynamic sharing of the department’s current spectrum allocation to accelerate spectrum sharing and 5G deployment.” According to a report by the Wall Street Journal, the Pentagon’s plans are likely to involve creating a 5G military cell network, which the Pentagon would then lease to enterprises in the manufacturing, tech and telecom industries. The Pentagon currently uses a sizable portion of available 5G space for radar and aviation, but the government appears to believe that repurposing it for commercial and government 5G use is a more beneficial strategy. 

The Federal Communications Commission is apparently gearing up to hold an auction of some of the Pentagon-controlled bandwidth in December of 2021. According to Craig Moffett, an analyst for telecom and media research firm MoffettNathanson LLC, the entirety of the spectrum band controlled by the Pentagon could fetch as much as $100bn at auction.

Some people familiar with the matter have speculated that the resulting network could look a lot like FirstNet, a private communications network used by first responders and operated under government contract by AT&T. With FirstNew contracts costing as much - if not more - than a standard phone contract, the telecom company that ends up fulfilling a Pentagon-backed, “nationalised” 5G network could end up with a huge advantage over its competitors. 

Major US telecoms have raised the issue, protesting that the Pentagon selling spectrum directly to telecom operators would circumvent the current, auction-based system and subvert competition. 

However, the movement reportedly has popular bi-partisan support in congress, as it is increasingly seen as a way to “edge out” China from the US’ 5G networks, as well as bring 5G to underserved communities. In a virtual industry conference last month, ex-Google CEO Eric Schmidt said that a national 5G network using the Pentagon’s spectrum was the US’ best chance of “beating China” and averting the disaster of a world where China outstrips the US in 5G.  

Share article

May 4, 2021

Verizon to sell Yahoo and AOL for $5 Billion to Apollo

Yahoo
AOL
investment
Verizon
Tilly Kenyon
2 min
Verizon has offloaded its media business to Apollo Global Management in a deal valued at $5 billion
Verizon has offloaded its media business to Apollo Global Management in a deal valued at $5 billion...

US telecoms giant Verizon is selling its media assets, which includes Yahoo and AOL, to Apollo Global Management, a US private equity firm in a deal worth $5bn (£3.6bn). Verizon will retain a 10% stake in the company, which will be known as Yahoo at the close of the transaction and continue to be led by CEO Guru Gowrappan

According to Verizon this corporate carveout will allow Verizon Media to aggressively pursue growth areas and stands to benefit its employees, advertisers, publishing partners, and nearly 900 million monthly active users worldwide. 

“The past two-quarters of double-digit growth have demonstrated our ability to transform our media ecosystem. With Apollo’s sector expertise and strategic insight, Yahoo will be well-positioned to capitalise on market opportunities, media, and transaction experience and continue to grow our full-stack digital advertising platform. This transition will help to accelerate our growth for the long-term success of the company.” said Guru Gowrappan, CEO, Verizon Media.

Dominating the internet

Yahoo and AOL once dominated the internet but were subsequently overshadowed by firms like Google and Facebook, instead, they both became giant publishers. Yahoo Sports is a popular destination with sports fans, and Yahoo Finance provides a wealth of information for retail traders. AOL acquired a variety of early media brands, including the Huffington Post (now HuffPost), TechCrunch and Engadget, and several digital ad-tech companies to create a giant platform for advertising. Verizon bought Yahoo in 2017 and AOL in 2015 for a combined $9bn, so are selling at a considerable loss. 

“The next iteration requires full investment and the right resources. During the strategic review process, Apollo delivered the strongest vision and strategy for the next phase of Verizon Media. I have full confidence that Yahoo will take off in its new home.” said Hans Vestberg, CEO, Verizon. 

The sale by Verizon comes after it disposed of blogging platform Tumblr in 2019 and news website HuffPost last year. Under the terms of the agreement, Verizon will receive $4.25 billion in cash and preferred interests of $750 million. The transaction includes the assets of Verizon Media, including its brands and businesses. 

The transaction is subject to satisfaction of certain closing conditions and expected to close in the second half of 2021.

Share article