The US Department of Justice (DoJ) is holding up Verizon Wireless’ acquisition of spectrum from a number of cable companies, but the delay is related to competition issues rather than the frequencies itself, the Wall Street Journal reports.
Apparently, with Verizon proposing the disposal of some unused spectrum if the cable deals go ahead, the Federal Communications Commission (FCC) is prepared to green-light the plan.
However, the deals with the cable companies also include the provision to collaborate on services, which the DoJ is concerned could limit competition, meaning that it is unlikely to approve the transactions in their current form.
Verizon Communications, the parent of Verizon Wireless, has a fixed line proposition called FiOS, which puts it in competition with the cable companies. According to the WSJ, while Verizon Wireless has begun selling services from its cable partners in its stores, this has only taken place where FiOS is not available – leading to concern that the various parties have called a “truce,” and agreed to divide the market.
It was suggested that the FCC is set to approve the deals, with some conditions. This is likely to include mandated support for data roaming “at reasonable rates,” and impose tight deadlines for the use of the spectrum.
However, it was also noted that the FCC shares the DoJ’s opinion about the competition issues, which may mean that further conditions are attached.
Verizon Wireless announced a spectrum deal with SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks, late last year. This was followed by separate deals with Cox Communications and Leap Wireless.
In April 2012, Verizon said it would sell part of its existing 700MHz frequency allocation once the cable deals were completed – which was seen as an attempt to appease concern about the amount of spectrum it would hold.
The company subsequently inked a complex agreement with T-Mobile USA, which will see the pair swapping frequencies in 76 markets to gain better allocations; T-Mobile buying spectrum from Verizon in 125 areas, and Verizon acquiring frequencies in T-Mobile in 17 territories.