Verizon and cable operators settle antitrust concerns for cable spectrum deal

14 August 2012 | Kavit Majithia


US regulators are set to approve Verizon’s projected $3.9 billion deal to acquire spectrum from cable consortium SpectrumCo.

According to a Wall Street Journal source, the cable companies have reached a broad agreement to settle antitrust concerns.

The cable operators in the consortium, which includes Comcast, have agreed to limit the scope and duration of side agreements to sell each other’s services. Verizon’s tie-up had seen marketing pacts implemented by cable companies that effectively meant these operators were no longer competing for consumers for broadband, internet, television and phone services but working together, hindering competition in the market.

The Justice Department and FCC officials are reportedly preparing to approve the deal in the coming weeks. The Justice Department has dropped its early objections after the companies in question agreed to drop joint venture agreements to five years or less, meaning they must apply for antitrust clearance for a new tie up after that period.

Verizon and Comcast will not implement joint marketing agreements in internet, TV and phone services, areas where the companies presently compete. Critics and consumer groups had argued Verizon may not roll out its FiOS service in areas where Comcast operates, limiting the options of people living there. Verizon had already said however that it did not intend to extend its fibre optic network that delivers the FiOS service.

Verizon’s spectrum deal includes buying airwaves purchased by Comcast, Time Warner Cable, Bright House Networks LLC and Cox Communications during a 2006 airwaves auction.