Verizon Wireless could be on the verge of garnering government approval for a haul of spectrum acquisitions, according to a story from Reuters citing “people with knowledge of the situation.”
According to Reuters, the deal is still dependent on the parties involved convincing the Department of Justice that the deals would not lead to higher costs for consumers.
Unlike the AT&T/T-Mobile USA transaction that the government shot down late last year, it appears Verizon Wireless’ spectrum acquisition attempts have garnered favor in that they are not taking a current competitor out of the marketplace. Opponents counter that while the deals might not take a current competitor out of the market, they would prevent some from entering and would consolidate more spectrum in the hands of the nation’s largest carrier to the detriment of competition.
The FCC late last week blocked attempts by opponents to extend the comment period on the deals that was instituted following a spectrum sale/swap announced by Verizon Wireless and T-Mobile USA last month. That deal will see T-Mobile USA gain significant spectrum assets from Verizon Wireless that is predicated on Verizon Wireless gaining approval for its deal with the cable companies. The deal also saw T-Mobile USA drop its opposition to the Verizon Wireless transactions.
One issue the Reuters story does bring up is concern from the DoJ regarding a marketing agreement between Verizon Wireless and the cable companies. That agreement, which has already begun in some markets, has seen the companies begin to offer quad-play services using Verizon Wireless’ mobile service.
“The Justice Department has big concerns about what mischief could be done in undefined agreements that would lock out competitors,” a source told Reuters.
If approved, Verizon Wireless has said it would move forward with plans to auction off its A- and B-Block spectrum assets that could spell opportunity for rivals. Verizon Wireless is currently relying on the 22 megahertz of C-Block, 700 MHz spectrum it acquired during the 2008 auction, while it spent approximately $4.7 billion on its A- and B-Block licenses. Opponents have noted that those licenses are not as valuable as the 1.7/2.1 GHz licenses Verizon Wireless is looking to acquire from cable operators as there are remaining concerns over potential interference issues.
For Verizon Wireless, the 1.7/2.1 GHz licenses would better fit with its intent of adding capacity to its LTE service in high-traffic markets. Throwing more 700 MHz spectrum at capacity constraints in those tightly packed markets will result in interference issues due to the strong propagation characteristics of the 700 MHz spectrum band. The 1.7/2.1 GHz band will allow the carrier to place cell sites closer together to handle capacity without running into interference concerns.
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