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Antitrust regulators OK Verizon purchase of unused airwaves

August 16, 2012|By Salvador Rodriguez
  • A Verizon Wireless sign at an outlet in Manassas, Va.
A Verizon Wireless sign at an outlet in Manassas, Va. (Karen Bleier / AFP/Getty…)

A $3.6-billion deal between Verizon Wireless and several cable companies received a go-ahead Thursday from the U.S. Justice Department.

The agreement now awaits final approval from the Federal Communications Commission. If approved, the deal would allow Verizon to continue expanding its 4G LTE network by gaining unused portions of the airwaves from the cable companies.

T-Mobile would also benefit from the approval. The company entered into a deal with Verizon in June that would help T-Mobile improve its own 4G network and an LTE network expected to roll out next year.

In exchange, Verizon primarily got leverage to get the deal approved by regulators, and that's seemed to work thus far.

The Justice Department, though, did mandate that Verizon and its cable partners agree to restrict the amount of cross-marketing agreements they make. That limitation will last until 2016, and its purpose is to ensure that all the companies involved have an incentive to remain competitive.

"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," Joseph Wayland, acting assistant attorney general in charge of the department’s antitrust division, said in a statement.

Among the cable companies involved in the deal are Comcast Corp. and its partners, Time Warner Cable Inc., Bright House Networks and Cox Communications.

As the deal now heads to the FCC, it has a good chance of receiving final approval. FCC Chairman Julius Genachowski put out a statement Thursday saying he believed that the agency should approve the deal following the Justice Department's clearance.

"Approval of the substantially modified transaction will promote the public interest and benefit consumers in several ways," Genachowski said in the statement. "By advancing U.S. leadership in 4G LTE deployment, the transaction marks another step in our effort to promote the U.S. innovation economy and make state-of-the-art broadband available to more people in more places."

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