Bloomberg News

Verizon, Comcast Said Agree to U.S. Demands on Airwaves

August 15, 2012

Verizon Wireless and Comcast Corp. (CMCSA:US) have agreed in principle with U.S. antitrust officials to limit joint ventures as a condition for buying airwaves from cable companies, making it likely the deal will be approved early next month, people with knowledge of the negotiations said.

The remaining terms of cross-marketing agreements between Verizon Wireless, the largest U.S. mobile provider, and the cable companies led by Comcast may be hammered out within the next week, allowing the U.S. Justice Department to approve the transaction, three people said yesterday.

Federal Communications Commission Chairman Julius Genachowski, a Democrat, may ask his four fellow commissioners next week to approve the deal, one person close to the matter said. The transaction needs a majority vote from the commission, which regulates airwaves use.

U.S. officials are seeking conditions that would preserve competition in a telecommunications market characterized by locally exclusive cable companies and a wireless sector dominated by four players, with 60.7 percent of the market held by Verizon and No. 2 AT&T Inc. (T:US)

For Verizon Wireless to win approval for its $3.6 billion purchase of unused airwaves from cable companies, it had to agree with Comcast, Time Warner Cable Inc. (TWC:US) and other cable providers to restrictions on the duration and geographic reach of cross-marketing accords, said the people, who declined to be identified because they weren’t authorized to speak publicly about the matter.

Charles Miller, a spokesman for the Justice Department and Neil Grace, an FCC spokesman, declined to comment in e-mails.

‘Constructive Conversations’

“We continue to have constructive conversations at both the FCC and Department of Justice and anticipate approval later this summer,” said Richard Young, a Verizon spokesman. John Demming, a Comcast spokesman, didn’t immediately return a phone call seeking comment.

The sides are close to an agreement to bar cross-marketing in areas served by Verizon’s FiOS high-speed Internet, telephone and television service, three of the people said. One person said the ban extends to areas where Verizon plans to extend the service.

Verizon Wireless in 2009 decided it wouldn’t increase its planned deployment of FiOS, according to a company filing at the FCC.

Under the tentative conditions, the companies must return to federal authorities after a period of about four or five years for permission if they wish to continue to sell each other’s products, two of the people said.

Reviewing Deal

The FCC, which has an Aug. 21 target date for finishing its review, is vetting the deal along with the Justice Department.

The Communications Workers of America has asked regulators to bar cross-marketing everywhere Verizon offers service over wires, and to require that the company continue building the high-speed FiOS network.

Verizon Chief Executive Officer Lowell McAdam in a June 28 meeting urged Genachowski to approve the deal, and said the transaction would help meet surging demand for high-speed wireless service, according to a filing posted July 3 on the agency’s website.

Verizon Wireless, based in Basking Ridge, New Jersey, is 55 percent owned by New York-based Verizon and 45 percent-owned by Vodafone Group Plc (VOD), based in Newbury, England.

To contact the reporters on this story: Sara Forden in Washington at sforden@bloomberg.net; Todd Shields in Washington at tshields3@bloomberg.net.

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; Bernard Kohn at bkohn2@bloomberg.net.


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Companies Mentioned

  • CMCSA
    (Comcast Corp)
    • $54.24 USD
    • -1.17
    • -2.15%
  • T
    (AT&T Inc)
    • $36.17 USD
    • -0.19
    • -0.53%
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