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Verizon Wins Approval for Huge Spectrum Purchase

Verizon Wireless
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Verizon Wireless

Verizon Wireless on Thursday won unanimous Federal Communications Commission approval to move forward with its $3.9 billion purchase of airwaves from the country’s largest cable providers.

An F.C.C. panel voted 5 to 0 to allow Verizon Wireless to expand its wireless data networks by tapping into the mostly unused airwaves of Comcast , Time Warner Cable , Bright House Networks and Cox Communications. The Justice Department approved the agreement last week, but advised that certain consumer-friendly adjustments should be made.

In addition to the spectrum, which Verizon Wireless said it would use in its new fourth-generation Long Term Evolution (4G LTE) wireless network, the partnership enables the cable companies to market Verizon services and in some cases sell their own services inside Verizon stores. Comcast, for instance, has already dispatched its sales force to Verizon Wireless stores in 21 markets. The cable company offers wireless customers discounts and other incentives if they sign up for Comcast’s phone, Internet and cable service.

“This purchase represents a milestone in the industry, and we appreciate the F.C.C.’s diligent work to review and approve the transaction,” Dan Mead, president and chief executive of Verizon Wireless, said in a statement.

David L. Cohen, executive vice president of Comcast, said the deal is “a smart and efficient way for Comcast to deliver a broader array of wireless services, and is an efficient deployment of this spectrum.”

More than 370 markets and nearly 75 percent of the United States population have access to Verizon Wireless’s 4G LTE network. The additional spectrum will help Verizon, the No. 1 carrier, accommodate the growing use of smartphone data.

The Justice Department had initially worried that Verizon Wireless’s spectrum transfer and cross-marketing arrangement would hinder competition and drive up costs. Regulators approved the transfer with suggestions of how the deal could avoid negatively affecting consumers.

The F.C.C.’s decision comes as the wireless industry has expressed increasing concerns that it is facing a spectrum crisis and that the current level of available airwaves will not accommodate the growing use of mobile devices. A spectrum shortage would result in slowed systems for smartphone users.

Cable companies bought spectrum at auction in 2006 with the hopes of eventually entering the wireless business themselves, but in most cases, the cost of building a retail footprint was too high. Verizon Wireless said it would acquire the cable companies’ spectrum shortly after government regulators rejected its chief rival AT&T’s $39 billion takeover bid for T-Mobile last year.

As Verizon and cable companies cheered the F.C.C.’s decision on Thursday, some consumer groups said it cemented the dominance of the giant companies in wireless and broadband services.

“By allowing Verizon and the cable companies to sell each other’s services, the D.O.J. and the F.C.C. are acknowledging what has been clear for some time — that broadband competition policy in the United States has failed,” said Gigi B. Sohn, president and co-founder of Public Knowledge, a nonprofit organization based in Washington that promotes an open Internet.

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