Regulators asked Verizon Wireless whether a partial rejection of its $3.6 billion plan to buy frequencies from cable companies would lead the mobile provider to abandon a planned airwaves sale.
The Federal Communications Commission asked the question in a letter posted on its website today. Ed McFadden, a Verizon spokesman, declined to comment.
“It adds to the narrative that the FCC has reservations about the Verizon-cable deals,” Jeffrey Silva, a Washington- based analyst with Medley Global Advisors, said in an interview. The agency may be concerned that largest U.S. mobile provider Verizon would grow as other companies face limited opportunities for more airwaves, he said.
The FCC and Justice Department are scrutinizing Verizon’s plan, announced in December, to buy unused airwaves from cable companies led by largest provider Comcast Corp. (CMCSA:US) and No. 2 Time Warner Cable Inc. (TWC:US) Verizon said on April 18 it would sell another set of airwaves covering dozens of cities if allowed to buy the cable holdings.
Verizon Wireless and competitors AT&T Inc. (T:US), T-Mobile USA and MetroPCS Communications Inc. (PCS:US) are seeking to boost spectrum holdings to ensure they have adequate capacity as demand for services such as Web browsing and video streaming rises. AT&T attempted and failed to buy T-Mobile for $39 billion last year, citing spectrum as one of the main reasons for the deal.
Regulators are trying to make sure the market remains competitive and that no one carrier has spectrum holdings large enough to reduce rivalry. The government blocked AT&T’s T-Mobile purchase, saying it would have hurt competition.
Verizon Wireless, based in Basking Ridge, New Jersey, is owned by Verizon Communications and Vodafone Group Plc (VOD), based in Newbury, England.
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