Verizon Wireless is about to finalize a multi-billion dollar deal to buy a cable spectrum. The only remaining hurdle it has to face is the Federal Communications Commission.
The Department of Justice has given its blessing to Verizon and smaller cable companies involved in a deal that their agreements are a go. However, the approval is not without full. The parties involved were told to restrict certain parts of their commercial agreements to abide by the anticompetitive concerns the FCC and the DOJ raised with the said deal.
For its part, Verizon has agreed to sell some spectrum to its rival, T-Mobile USA, in exchange for the approval of the deal.
Now the final requirement needed by the FCC is for Verizon to allow smaller competitors to share its network assets, particularly in roaming onto its data network. Verizon has been at odds with the Federal Communications Commission starting a year ago when it struck at a ruling that requires it to offer roaming agreements to smaller rivals at reasonable rates. Verizon is already engaged in 68 data-roaming agreements and is fighting the agency to cancel the ruling. Smaller competitors say the ruling allow them to compete with Verizon and other bigger operators.
There are still small operators that cannot secure roaming agreement with Verizon and AT&T even if these big companies are making money out it. Consumer advocates and other groups are pushing the FCC to make data roaming a requirement for Verizon to successfully finalize the current $3.9 billion spectrum deal .
And Verizon appears to be willing to give in to this requirement. In a formal filing with the FCC, Verizon offers to voluntarily agree with smaller operators to allow them to use data romaing at reasonable rates. Verizon also agrees to hasten the build-out timetable required by Advanced Wireless Service spectrum rules on auctions.
To please the FCC further, Verizon is also agreeing to serve 30 percent of the population being served by the spectrum it plans to acquire from T-Mobile and Leap Wireless in a 3-year plan. Also, Verizon will be covering 70 percent of the population living in areas where these spectrum licenses can be used. The data roaming commitment offered by Verizon will be good for five years, as per the filing.
The move by Verizon to agree to some concessions to secure a deal is not the first time. In one such move, Verizon responded to its critics who claim the company would control too much wireless spectrum by buying the licenses of cable companies by voluntarily offering the sale of some of its existing blocks of spectrum assets.
In the spring, the company revealed its plan to sell the700 MHz band wireless spectrum in the A and B blocks. The following June, Verizon also agreed on a deal with T-Mobile to sell some its AWS spectrum as well as swapping some licenses for T-Mobile’s own in some markets.
Officials at the FCC were surprised by the move of Verizon but were at the same time pleased with the creative solution the company offers to the problem. It’s a working strategy for Verizon instead of being forced to follow an FCC-mandated plan of sharing the spectrum to parties involved.
The chairman of the FCC, Julius Genachowski, said he’s happy with Verizon’s offer and has circulated an order four other commissioners suggesting to approve the deal.