Verizon Wireless' (NYSE:VZ) $3.9 billion purchase of AWS spectrum from a group of cable companies--and the cross-marketing deals Verizon signed with them--appear headed for approval after the companies and regulators reached an agreement to assuage antitrust concerns, according to a report in the Wall Street Journal.
The report, citing unnamed sources familiar with the matter, said that the companies have agreed in principle with the Department of Justice to limit the size and scope of their cross-marketing commercial agreements, which have come under withering criticism from consumer groups and the Communications Workers of America.
According to the report, the companies agreed to limit the length of their joint ventures to five years or less, and would have to re-apply for antitrust clearance after that. The deals are now expected to be approved within the next few weeks.
The report largely fits with a Reuters report from earlier this month, which said that Verizon would have to agree to tough restrictions on its proposed commercial deals to get approval from the DOJ. The Journal report also said that Verizon and Comcast agreed to limit their cross-marketing deal so that Verizon will not be able to sell Comcast services in areas where it sells FiOS service. Critics have said the deals will effectively mean the companies will stop competing with each other in certain markets.
FCC Chairman Julius Genachowski is also poised to circulate an order to the other four FCC commissioners to approve the deal, the report said. Verizon has agreed to buy nationwide AWS spectrum holdings from SpectrumCo--a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks--and Cox Communications. According to the report, the FCC will require that Verizon offer data roaming on the spectrum to other carriers at reasonable rates and use the spectrum within a few years.
Much of the opposition from within the wireless industry seemed to fade away in June after Verizon and T-Mobile USA announced a proposed AWS spectrum swap, a transaction contingent on Verizon obtaining approval of its deals with the cable companies. The Rural Cellular Association, MetroPCS (NASDAQ:PCS) and public interest groups have remained wary of the deal though, arguing that regulators should impose strict conditions and make sure Verizon is not warehousing its spectrum. T-Mobile has argued that getting the AWS spectrum from Verizon--which will allow it to cover an additional 60 million people--will enable it to deploy LTE more robustly.
- see this WSJ article (sub. req.)
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