Despite a torrent of opposition, the spectrum part of Verizon's cable deal seems likely to pass muster at the Federal Communications Commission, according to a recent report in Reuters. Reuters' anonymous sources indicate that the FCC is focused on the spectrum purchase part of the deal, whereby Verizon Wireless pay $3.9 billion for airwaves from four cable carriers.
The other part of the deal - the cross-marketing arrangements between Verizon and the cable companies and the joint operating venture - are running into much greater opposition at the U.S. Department of Justice, where the anti-trust aspects of the deal are under close scrutiny.
The unnamed source said, "The Justice Department has big concerns about what mischief could be done in undefined agreements that would lock out competitors."
The article points out that the FCC and the DOJ have agreed to a mutual veto: if either party objects to the deal it will have to be modified - or blocked. Reuters said:
"The Justice Department is weighing three options - it could sue to stop the side arrangements to the spectrum buys, it could seek to change them to prevent potential collusion, or it could monitor how the cross-marketing agreements that have already been put in place play out."
A decision is expected in mid to late August.
CWA yesterday released a report which focused on Verizon's decision to suspend build-out of its FiOS network and to use the proposed cross-marketing arrangement. It concluded that not only was the arrangement anti-competitive, but it would result in the loss of 72,000 FiOs-related jobs.
Congressional letter cautions FCC, DOJ on Verizon-cable deal (Speed Matters, Jul. 9, 2012)
Verizon's cable deals make headway but regulatory doubts linger (Reuters, Jul. 9, 2012)
CWA report: Verizon deal a jobs killer (Speed Matters, Jul. 10, 2102)