Verizon Gets FCC Approval For Spectrum Deal

The Federal Communications Commission of the United States has just given Verizon the go ahead for its deal to purchase spectrum space for $3.9 billion but it has included its own set of restrictions for the telecom giant. The permission comes after a green signal from the Justice Department which initially wanted to scrutinize the move to ensure that it doesn’t hinder competition in the area. Now, Verizon is going to be able to acquire nearly 20MHz of Advanced Wireless Service from SpectrumCo and through a joint venture from Comcast and Time Warner Cable and even from Cox Communications. Moreover, Verizon can also acquire licenses for spectra from prepaid provider Leap Wireless and it can give to T-Mobile a share of it that was agreed upon in return for T-Mobile not blocking Verizon’s move to acquire the large bandwidth.

The FCC has included some new rules in the deal and these include roaming requirements on the AWS spectrum that is going to be transferred to Verizon and on grounds that Verizon reports the status of the DSL broadband competition to the FCC on a periodic basis. The restrictions come as no surprise as the FCC was following the Department of Justice’s guidelines which will enable Verizon and the cable companies to jointly market each other’s products. The DOJ and the FCC were initially against the deal because it would restrict competition in the space but eventually Verizon agreed not to market its partners’ products in areas where the two were in direct competition as it would merely mean the revenues would go to Verizon through another service. The deal was initially proposed in December and was valued at $4.1 billion but because of the restrictions it has come down by $200 million.

The deal with T-Mobile was instrumental in getting the go ahead from both the agencies as it meant that Verizon would not be the only provider with the spectrum. The DOJ directives includes one that requires Verizon to finish its trade deal with T-Mobile no later than 45 days after its transactions with the cable companies close. All this comes as good news to Verizon which has also been rated as the best telecom operator in the Northeastern United States scoring well above AT&T and Sprint. It only marginally leads T-Mobile but its size is surely going to help it in the future.