Verizon Wireless’s plan to buy spectrum from various cablecos appears to have moved a step closer to receiving FCC clearance, Reuters reported.
Referring to two people with knowledge of the situation, the news agency said that the Federal…
Verizon Wireless’s plan to buy spectrum from various cablecos appears to have moved a step closer to receiving FCC clearance, Reuters reported.
Referring to two people with knowledge of the situation, the news agency said that the Federal Communications Commission is prepared to sanction the US$3.9bn acquisition of AWS (advanced wireless services) spectrum.
Over the last few months, while the FCC has been deliberating over the deal, Verizon has freely committed to making a number of spectrum divestments, contingent on its AWS buy being approved.
In April Verizon announced an open sale of all its 700MHz A and B licences. Last month it swapped and sold AWS spectrum with T-Mobile USA, effectively silencing Deutsche Telekom’s subsidiary which was previously among the critics of Verizon’s deal with the cablecos.
However, although it looks likely that the deal will win FCC approval it still has to get the green light from the Department of Justice (DOJ), which is conducting an antitrust review of the proposed transaction. An unnamed source told Reuters that the department had concerns over the marketing agreements which are part of the deal.
As part of the contract between Verizon and JV SpectrumCo – Comcast, Time Warner Cable and Bright House – the companies would collaborate by selling each others products and form an “innovation technology joint venture”.
The DOJ is reportedly sceptical of close collaboration between the largest wireless operator, Verizon, and the largest cableco, Comcast, on antitrust grounds. The agency has concerns that the tie-ups will shut out competitors and lead to higher prices for consumers.
The concerns echo those raised by senator Herb Kohl, the chairman of the senate’s antitrust subcommittee, in a letter to the FCC in May who had expressed “serious concerns” that the deal would turn “fierce competitors” into “business partners”.
The DOJ is reportedly weighing up three options: it can sue to stop the marketing agreements, try to convince the companies to amend them, or monitor how they play out.
For the cablecos, it has been reported that the deal to sell AWS to Verizon is contingent on the marketing agreements, so any change to the agreement could put the sale in doubt.
No public decision from either the FCC or the DOJ is expected until August at the earliest. A Verizon spokesperson told Reuters that it still expects the deal to be approved later in the summer.
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