FCC Imposes Conditions on Verizon Wireless-Cable Deals

The Federal Communications Commission on Thursday announced approving Verizon Wireless’ $3.9 billion acquisition of spectrum from Comcast and other cable companies while granting the wireless giant permission to swap spectrum with Leap Wireless International and assign licenses to rival T-Mobile USA.

The FCC found the deals were in the public interest but imposed as conditions certain voluntary commitments by Verizon Wireless, including roaming, buildout and reporting obligations.

Verizon Wireless also must complete its spectrum swap with T-Mobile USA within 45 days of its closing of the other pacts. Verizon Wireless and T-Mobile USA agreed to swap airwaves in a deal that improves T-Mobile’s spectrum position in 15 of the top 25 markets. Verizon Wireless plans to assign to T-Mobile USA 47 of the licenses that it is acquiring from the cable companies and Leap, according to the FCC order.

FCC approval comes in the wake of a settlement agreement the Justice Department reached with Verizon Wireless and the cable companies. Of particular concern to antitrust regulators: co-marketing agreements between VzW and the cable companies to sell each other’s wireless, landline voice, Internet and TV services. The companies have agreed to limit the scope and length of the deals, although some critics have complained that the conditions are too lenient.

Verizon Wireless, the largest U.S. wireless provider with 88.8 million retail postpaid subscribers based on second-quarter results, has cited its need for spectrum to meet the skyrocketing demand for mobile broadband services. The company is acquiring 152 Advanced Wireless Services licenses from the cable companies involved in the deals: Bright House Networks, Comcast, Cox and Time Warner Cable.

Verizon Wireless and the cable companies also have entered into a joint venture to develop ways to integrate landline and wireless services.

U.S. cable companies including Comcast have mostly failed to compete in the wireless phone market and are divesting assets that are not core to their businesses.

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