Did Verizon Wireless Silence Competitor With Spectrum Deal?

T-Mobile swap could pave way for regulatory approval of cable deals

Verizon Wireless gave regulators something else to consider as they review the company's controversial $3.6 billion deals to acquire wireless spectrum and carve out marketing deals with the nation's largest cable companies.

In what is being seen as a move to improve its position with the Department of Justice and the Federal Communications Commission, which are reviewing those deals, Verizon Wireless agreed Monday to swap spectrum holdings in 218 markets with T-Mobile USA for undisclosed terms.

Some of the spectrum included in the swap with T-Mobile is spectrum Verizon Wireless agreed to purchase from Spectrum Co. (Comcast, Time Warner, and Bright House), and from Cox and Leap, making the T-Mobile deal contingent on the more controversial deals with the cable companies.

Verizon's deals with its former cable rivals have been under attack from some lawmakers, public interest groups and competitors, such as T-Mobile. Now it appears that Verizon has found a way to silence at least one of the critics of those deals.

"Prior to these divestitures, we believed the transaction represented an unfair concentration of spectrum in the hands of the nation's largest wireless carrier. The significant spectrum divestitures by Verizon announced today are good for competition and consumers," T-Mobile said in a statement.

While the deal with T-Mobile addressed the concentration of spectrum, it didn't address the side deals with the cable companies.

"That Verizon Wireless feels the need to buy off T-Mobile to close its spectrum/marketing deals with the country's largest cable operators underscores just how bad this deal really is for American consumers and competition generally," said Harold Feld, svp of Public Knowledge, one of the biggest critics of the deals. "The true danger lies not only in the concentration of spectrum in the hands of the leading wireless provider, but [also] with the cozy, cartel-like arrangements between Verizon, Comcast and the other MSOs party to the deal."


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