DOJ green-lights Verizon-cable deal – with conditions
#SuryaRay #Surya The US Department of Justice is going to let Verizon’s acquisition of the cable companies 4G spectrum fly, though its imposing some minor conditions on their plan to divvy up the wireline and wireless markets. Now Verizon needs only the approval of the FCC to close the $3.9 billion deal.
For the last year Verizon has been trying to buy the unused Advanced Wireless Services (AWS) licenses of Comcast, Time Warner Cable, Bright House and Cox Communications, giving it a treasure trove of new airwaves for its future LTE expansion. But those companies aren’t just swapping cash for spectrum. They also revealed so-called joint-marketing agreements, essentially deals to resell each other’s wireline and wireless services.
The Justice Department is imposing a five-year limit on those joint-marketing agreements, after which they’re presumably subject to additional antitrust review. The other condition isn’t much of a condition at all: Verizon has agreed to not to resell cable’s residential services in areas where it offers its FiOS fiber-to-the-home network, which Verizon was never planning to do in the first place. While it’s getting killed by cable in territories it only has pokey DSL, Verizon can compete head-to-head with cable in its FiOS markets.
Surprisingly spectrum concessions seemed to be the deciding factor for the DOJ. Antitrust lawyers said that Verizon’s agreement to sell T-Mobile a portion of its AWS haul was a key factor. Here’s the statement from Acting Assistant Attorney General Joseph Wayland, who heads up the DOJ’s Antitrust Division:
“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. … 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.”