Verizon gets green light to buy airwaves

The US Justice Department has approved Verizon’s planned $3.9 billion acquisition of spectrum from Comcast, subject to conditions designed to safeguard competition.

It says it will allow the deal – as well as T-Mobile USA’s subsequent purchase of a chunk of the same spectrum – to go ahead, on the grounds that it will benefit consumers.

Verizon agreed to acquire the spectrum in December 2011, and this June agreed to transfer a significant portion of it to T-Mobile – the smallest of the US’ four national operators – in a move which sweetened the deal for the Justice Department.

But the companies are to be forced to make changes, aimed at protecting competition. Notably, the Justice Department has been concerned that agreements between Verizon and cable companies would have required Verizon Wireless to sell the cable companies’ services on an ‘equivalent basis’ with FiOS, making it harder for Verizon to sell its own services. The settlement, therefore, bars Verizon from selling cable company products in FiOS areas and removes the restrictions on its ability to sell FiOS.

It also places a time limit – December 2016 – on a proposed deal whereby Verizon will resell cable companies’ services to customers in areas where Verizon sells DSL Internet service. It also places time limits on a proposed technology joint ventured.

“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,” says Joseph Wayland, acting assistant attorney general in charge of the Justice Department ‘s Antitrust Division.

“The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.”

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