The United States Federal Communications Commission is all set to approve Verizon’s deal to acquire the airwave spectrum from various cable companies including Time Warner and Comcast. This is a great step forward for Verizon as it will enable the telecom giant’s 4G LTE coverage beyond the current spectrum that is uses. As of now, Verizon is limited to using the 700MHz spectrum.
Verizon is currently the largest mobile service provider in the US with almost a 110 million customers. In an announcement in December, the company said that it would make an attempt to buy the Advanced Wireless Spectrum for nearly $4 billion. The deal has gone through rather smoothly up until now when the company has come against the Justice Department which is posing a slight hindrance to the company’s deal.
The reason for the Justice Department’s reluctance to sign off on the deal is that there will be no room for competition should Verizon acquire the entire airwave spectrum. According to sources in the department, the Justice Department is concerned that it will lead to a monopoly in the broadband internet service sector. While the FCC is prepared to push the deal through, antitrust agents from the Justice department are not willing to pass it just yet.
Congress has been scrutinizing the deal thoroughly and has taken into consideration the strong opinions of other wireless providers. In addition to just competition worries, it was also stated that companies such as T-Mobile would be better suited to the spectrum when it comes to delivering services such as video streaming. Verizon cleared T-Mobile’s objection by swapping some of its telecom space with it. While this cleared the obstacle of other companies disrupting the wireless space, Verizon is still stuck with the Justice Department which appears to be intent onensuring that internet prices do not soar because of the acquisition.
The FCC deal may be near completion but it will still take some time for the deal to fully go through as two agencies need to offer clearance for the same. Until then, Verizon will have to play its cards carefully as the deal will be carefully watched by both the Congress as well as other government regulators. If the negotiations go through, the Verizon and Comcast partnership is likely to be fruitful for both companies in the long run.
