US operator Verizon Wireless has received approval for its US$3.9bn spectrum buy from the Department of Justice (DOJ), however the antitrust regulator has limited commercial tie-ups arranged with cablecos. Verizon’s spectrum divestiture to T-Mobile…
US operator Verizon Wireless has received approval for its US$3.9bn spectrum buy from the Department of Justice (DOJ), however the antitrust regulator has limited commercial tie-ups arranged with cablecos.
Verizon’s spectrum divestiture to T-Mobile USA was also cleared.
In late 2011 Verizon had agreed to buy AWS spectrum from SpectrumCo, a JV by cablecos Comcast, Time Warner Cable and Bright House Networks, and also from Cox Communications for US$3.9bn and a series of tie-ups.
The DOJ said it approved the transaction subject to the companies making changes to a series of agreements concerning both the sale of bundled wireless and wireline services, and the formation of a technology research joint venture.
The department said the proposed settlement protects competition and consumers by removing agreements that would have lessened the companies’ incentives to compete aggressively in the areas where Verizon’s fibre-optic cable services offer a competitive alternative to the cable companies’ video and broadband products.
“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers,” said Joseph Wayland, acting assistant attorney general in charge of the DOJ’s antitrust division.
The DOJ also cleared an agreement between T-Mobile and Verizon signed in late June, whereby the operators would swap AWS spectrum in 218 US markets, with T-Mobile purchasing additional licences from Verizon.
For Verizon this move had silenced a leading critic in T-Mobile while also appeasing regulators concerned about spectrum hoarding.
The DOJ said the clearance decision came after a closely coordinated investigation with the Federal Communications Commission (FCC), with additional assistance provided by the New York State Attorney General’s Office.
Commenting on the DOJ’s approval, FCC chair Julius Genachowski said in a written statement that in light of the concessions the commission should now approve the deal and that he would be circulating a draft amongst his colleagues to do give the transaction consent.
“A rigorous review by the Federal Communications Commission and Department of Justice staffs revealed that the deal as proposed by Verizon Wireless and the cable company owners of SpectrumCo posed serious concerns, including in the wired and wireless broadband and video marketplaces,” said Genachowski.
“Because of these substantial undertakings and in light of the Consent Decree the companies executed with the Justice Department today, I believe the Commission should now approve this transaction, and I will be circulating a draft order to my colleagues that would do so,” he said.
The FCC chair said the deal was now in the public interest and benefit consumers. His rationale was that it would advance US leadership in 4G LTE deployment and put to work up to 20MHz of currently unused spectrum.
“I look forward to working with my colleagues toward a final Commission vote in the near future.”
