Department of Justice Tweaks Verizon's $3.6 Billion Spectrum Deal

Paul Lilly

The U.S. Department of Justice said it would approve a $3.6 spectrum deal between Verizon and four cable companies -- Comcast, Time Warner Cable, Bright House Networks, and Cox Communications -- if certain changes are made to a series of agreements that it deemed anti-competitive. As originally constructed, the DoJ feared the deal would ultimately harm competition and lead to higher prices and lower quality service for consumers.

Verizon struck agreements with the four largest cable companies in the U.S. last year to purchase spectrum that it intends to use to flesh out its 4G Long Term Evolution (LTE) network. As part of the deal, cable companies would be able to bundle Verizon 4G plans in with their own offerings.

"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," said Joseph Wayland , Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division. "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."

As approved by the DoJ, the companies in the deal will be subject to a review every four years and must submit regular reports in the meantime. In addition, in areas where Verizon's FiOS service isn't offered, Verizon must sell the local cable company's Internet and service bundles.

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