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Thread: US Justice Department Probing Recent VZW Spectrum Deals for Potenial Antitrust Issues

  1. Editor in Chief
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    US Justice Department Probing Recent VZW Spectrum Deals for Potenial Antitrust Issues

    Recently, Verizon has been making several deals to acquire more spectrum for their networks, and it seems that they may have drawn the attention of the antitrust division of the U.S. Department of Justice.

    Earlier this month it was revealed that Verizon Wireless had inked out a couple deals to get more spectrum from other companies. At the beginning of the month, Verizon announced they were spending about $3.6 Billion to join an alliance with Comcast, Time Warner and Bright House, that would give them access to a huge swath of spectrum. Then, they recently announced they worked out a deal to acquire 20MHz AWS spectrum from Cox Communications for around $315 Million.

    The DoJ will be investigating this to determine whether these transactions concentrate too much control of airwaves in in the hands of one company. They will also be looking into the marketing agreements between Verizon and the cable companies to see if they violate any antitrust laws.

    On December 19th, Verizon filed to gain approval of these transactions from the FCC. Mark Cooper, director of research at Consumer Federation of America, opposes the deal, and had this to say, “This agreement is diminishing competition in every way. It means the cable companies are no longer trying to do their own thing in wireless, it concentrates ownership of spectrum and it turns rivals such as Verizon and Comcast into partners.”

    However, regardless of this opposition, the investigation by the FCC and the DoJ will likely lead to an approval of the deals, although it is possible that Verizon will be required to sell off certain assets to balance it. Jeff Silva, senior policy director for telecommunications, media and technology at Medley Global Advisors LLC in Washington, made this comment, “There isn’t any indication that the cable companies were going to become serious wireless competitors in their own right. They had that spectrum sitting there and now they’ve found a good use for it. They’re not going to build their own networks to compete.”

    Although she declined to comment further, Gina Talamona, a Justice Department spokeswoman, said the antitrust division is examining the transactions. Apparently, Verizon didn't even know about this yet. A spokesman for Verizon Communications Inc., Peter Thonis, had this to say, “we have received no information on which to comment.”

    Source: Bloomberg
    Last edited by dgstorm; 12-21-2011 at 10:33 AM.
  3. Droid Ninja
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    I'm sorry, but in this instance, anyone can buy spectrum if they so choose. AT&T isn't being told it can't buy it.
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  4. Master Droid
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    i don't believe it's necessarily the spectrum they're having a primary issue with, it just increases the scrutiny. i think the major issue is that Verizon is giving up on their cable competitors (DirecTV, and more importantly, Fios), and partnering with the cable companies, to get that spectrum.
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    With great power comes great responsibility. You don't want one company having too much power. Even if Verizon has good customer service and phones, you still don't want them being the biggest. If that happens, they can squash the competition, then guess what: no choice, no freedom.
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