Wednesday, August 15, 2012

Conditional Approval for Verizon Wireless + CableCo Spectrum Deal

Verizon and cable operators made a number of concessions in order to gain preliminary approval from the U.S. Department of Justice for their proposed spectrum and co-marketing deal. FCC Chairman Julius Genachowski announced his support for the amended agreement.

In December 2011, Verizon Wireless announced a deal to acquire 122 Advanced Wireless Services spectrum licenses from SpectrumCo, a joint venture between Comcast Corporation, Time Warner Cable, and Bright House Networks, for $3.6 billion. The transfer of licenses will require approval from the FCC and review from the Department of Justice. The companies also announced several agreements to resell each others' services. The cable companies will have the option of selling Verizon Wireless' service on a wholesale basis. Furthermore, the companies will form an innovation technology joint venture to develop technology that better integrates wireline and wireless products and services.

To gain DOJ approval, the companies have agreed to a proposed settlement forbids Verizon Wireless from selling cable company products in FiOS areas and removes contractual restrictions on Verizon Wireless’s ability to sell FiOS, ensuring that Verizon’s incentives to compete aggressively against the cable companies remain unchanged.

In addition, under the proposed settlement, Verizon Wireless’s ability to resell the cable companies’ services to customers in areas where Verizon sells DSL Internet service ends in December of 2016 (subject to potential renewal at DOJ's sole discretion), thereby preserving Verizon’s incentives to reconsider its decision to stop building out its FiOS network and otherwise innovate in its DSL territory.

The DOJ is limiting the duration of a technology joint venture that the companies had planned to set-up to develop wireless + wireline solutions. In addition, the companies are limited in the exchange of competitively sensitive information.http://www.justice.gov/opa/pr/2012/August/12-at-1014.html

  • In June 2012, T-Mobile USA and Verizon Wireless announced a sale and exchange deal covering certain Advanced Wireless Services (AWS) spectrum licenses in 218 markets across the U.S. Some of the spectrum contemplated in this transaction included licenses that Verizon is purchasing from SpectrumCo, Cox and Leap, and the agreement is contingent on the closing of those transactions and is subject to regulatory approval by the Federal Communications Commission (FCC) and the Department of Justice.

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