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AT&T, Verizon Gain on Hope of Amicable Settlement of 5G Dispute

Published 01/04/2022, 05:29 AM
Updated 01/04/2022, 05:32 AM
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By Dhirendra Tripathi

Investing.com – Verizon (NYSE:VZ) stock and AT&T stock (NYSE:T) both rose in Tuesday’s premarket trading on hopes of an amicable settlement with U.S. authorities and airlines over the launch of new 5G services.

After first ignoring the advice of the Department of Transportation, both the firms agreed Monday to delay the rollout of a new 5G service until January 19. This is expected to give aviation regulators time to address safety concerns at airports arising from the use of new frequencies by 5G carriers. The telecom carriers have offered to reduce the power of their new 5G service for six months, beyond levels the companies had previously agreed upon.

The Federal Aviation Administration had prepared to issue flight restrictions that would have hampered both passenger and cargo flights in the country. That prospect is now off the table, at least temporarily.

Verizon was up 0.5% and AT&T was up 0.3% in response.

The launch of new 5G services is crucial for telecom companies, who need to generate returns on the billions of dollars they have invested in prized spectrum bands and network infrastructure.  

According to reports, lobby group Airlines for America had planned to appeal to a federal court to block Wednesday’s 5G rollout, concerned that it could interfere with cockpit safety systems.

Interference between spectrum bands used by different end-users for their services is a long-standing issue, particularly between telecom service providers and airlines. 

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