The deal between Verizon and several cable companies to acquire spectrum space was recently put on hold by regulatory bodies owing to the possibility of a monopoly but it appears that Verizon and the interested conglomerate of cable providers have formulated an agreement with the Department of Justice and the Federal Communications Commission to allow for it to go through. The interested cable companies include Comcast, Time Warner Cable and Bright House Communications and they are all in favor of the terms and conditions that have been proposed by the Department of Justice.
Under the terms of the deal, the partnership is going to last for 5 years and doesn’t allow for Verizon and the cable operators to sell each others’ services in regions where the three services i.e. telephone, broadband and phone services are in direct competition. According to sources the finalized deal is likely to be announced in three weeks’ time. The deal was initially announced in December last year which revealed Verizon’s intention to purchase 20MHz of the Advanced Wireless Spectrum that the cable companies had purchased in an auction by the FCC in 2006. Verizon and the cable companies planned to sell each others’ services in their respective stores. The reason the DoJ blocked this move in competing areas is to ensure that other competitors are not monopolized against.
Since the deal was announced, it came under a lot of fire from consumer advocates, labor unions and other telecom companies who accused Verizion of hoarding the spectrum space. One company, T-Mobile which was initially against the deal let go of its opposition after Verizon negotiated with it to sell a part of the spectrum once it got its approval from the FCC. According to sources in the FCC, the regulatory body is quite happy with Verizon’s deals as the company is flexible in its stance and makes reasonable concessions.
Currently, the deal is all set to go through and it will be beneficial for both Verizon and the cable companies. After 5 years the deal is going to be revaluated to ensure that it is not anti competitive to other companies in the business. The major modification came in with the removing of the joint marketing strategy which involved selling each others’ products. This is now allowed only in places where they are not in direct competition.
