Since December, Verizon and Comcast, the two largest wireless and wired carriers of their kind, have been negotiating with the U.S. Government to secure a spectrum licensing agreement. Basically, Verizon wants to be additional spectrum from Comcast, and the two companies will in exchange begin marketing each other's products. The transaction has faced intense regulatory scrutiny, and has several critics. In the latest development, it appears that the U.S. Justice Department and the FCC are prepared to sign off on the deal, but only if some very strict measures are put in place to reduce the possibility of either company monopolizing their respective market.
Because the DOJ has significant concerns about the anticompetitive potential of certain parts of the deal, it seems there are still some tough hurdles to be overcome. Here are some details in a quote from Reuters,
The biggest concern is that the agreement could create cutting-edge products only available to the consortium. If these tweaks to the agreement can be met, then it looks like the potential for that is reduced greatly and the deal will progress forward.The additional spectrum would give Verizon Wireless a bigger edge over competitors as they struggle to meet consumer demand for videos and other data-heavy services. Verizon Wireless is owned by Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L).
Negotiations with the Justice Department's Antitrust Division have been bruising, focusing on plans by Verizon Wireless and Comcast, the biggest mobile carrier and the biggest cable company, respectively, to market each other's products.
There has also been concern about a plan for a joint venture to develop new technologies, such as one to allow consumers to move seamlessly between wired and wireless hookups. Critics say it could create cutting-edge products only available to the consortium.
The path that the talks are on would lead to a consent decree that would forbid the cross marketing agreement where Verizon markets its FiOS product, according to the three sources, who were not authorized to speak on the record.
Cross marketing in the rest of Verizon's footprint and the joint research and development project would be allowed but only for a limited period of time, the sources said.