Bloomberg News

Verizon-Cable Spectrum Deal Said to Get Unanimous FCC Vote

August 22, 2012

Verizon Wireless won final U.S. clearance to buy unused airwaves from cable providers led by Comcast Corp. (CMCSA:US) as the Federal Communications Commission voted 5-0 to approve the $3.6 billion purchase, agency officials said.

The vote, described by two officials who declined to be named because the action hasn’t been made public, clears the way for a partnership between the biggest U.S. wireless provider and top cable companies including No. 1 Comcast and the second- largest, Time Warner Cable Inc. (TWC:US)

The transaction and accompanying cooperation pacts won antitrust approval Aug. 16 from the Justice Department.

Spokesmen Mark Wigfield of the FCC, Sena Fitzmaurice of Comcast and Ed McFadden of Verizon declined to comment.

Verizon agreed to sell some airwaves and to accelerate building out some frequencies as it sought regulatory approval, FCC Chairman Julius Genachowski, a Democrat, said in a statement issued Aug. 16 as he asked fellow commissioners to approve the deal.

Verizon in June agreed to sell airwaves to T-Mobile USA Inc., the smallest of the four nationwide wireless providers.

Verizon and the cable companies proposed the deal in December. They agreed not to cross-market each other’s services in areas served by Verizon’s FiOS high-speed data service, the Justice Department said as it approved the deal.

Smartphone Growth

Verizon, based in Basking Ridge, New Jersey, wants to add airwaves as customers increasingly adopt smartphones such as Apple Inc. (AAPL:US)’s iPhone to watch video and browse the Web.

The Justice Department’s conditions won’t do enough to ensure competition in a market characterized by locally exclusive cable companies and a wireless sector dominated by four players, critics said.

Final approval gives Verizon success where No. 2 mobile carrier AT&T Inc. (T:US) failed last year, when regulators barred it from buying T-Mobile because the transaction aimed at acquiring more airwaves would have eliminated the smaller carrier and reduced competition.

Verizon’s proposed sale of spectrum to T-Mobile turned the unit of Bonn-based Deutsche Telekom AG (DTE) from an opponent of the transactions into a supporter.

Closely held Bright House Networks contributed some of the airwaves being sold to Verizon by the cable group including Philadelphia-based Comcast and New York-based Time Warner known as SpectrumCo. Separately, Cox Communications agreed to sell airwaves to Verizon for $315 million.

Comcast owns 64 percent of SpectrumCo and is to receive about $2.3 billion from the sale, the companies said in a statement in December. Time Warner owns 31 percent of SpectrumCo and will receive about $1.1 billion. Bright House owns 5 percent of SpectrumCo and will receive about $189 million, the companies said.

Verizon Wireless 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 reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net


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Companies Mentioned

  • CMCSA
    (Comcast Corp)
    • $52.19 USD
    • 0.89
    • 1.71%
  • TWC
    (Time Warner Cable Inc)
    • $139.43 USD
    • 2.63
    • 1.89%
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