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Zack Hutchins
Director of Communications

Thursday, August 16, 2012

Justice Dept. allows Verizon deals with cable companies

VerizonBy Hayley Tsukayama

The Justice Department approved deals between Verizon Wireless and several cable companies Thursday under conditions to ensure that the proposals to swap spectrum and to cross-promote services would not harm competition in the telecommunications industry.

The agency worked with the Federal Communications Commission and the New York State Attorney General's Office on conditions for the deals' approval.

The deals, as The Washington Post reported in July, were flagged by Justice over concerns that they would stifle competition for landline Internet service. Verizon's FiOS service competes directly with cable companies involved in the agreements, including Comcast and Time Warner, and Verizon worried that the cross-promotion would eventually eliminate FiOS from the picture.

Among the requirements to let the deals move forward, Verizon, Comcast, Time Warner Cable, Bright House Networks and Cox Communications must dial down the scope and length of their marketing agreements. The rules prohibit cross-marketing in communities also served by FiOS exists — mainly in the mid-Atlantic — and impose a four-year limit on the deals is areas where FiOS is absent.

The Justice Department also approved Verizon's proposed spectrum sale to T-Mobile, and Verizon must announce a public process to sell other previously unused spectrum.

“By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers,” said Joseph Wayland, acting assistant attorney general for Justice's antitrust division.

FCC Chairman Julius Genachowski said the new requirements would “promote the public interest and benefit consumers in several ways,” including boosting the United States as a leader in bringing 4G LTE “to more people in more places”

Genachowski said that he believes the FCC should approve the deals and that he will circulate a draft to the full commission.