Verizon, Cox Deal Doesnt Set Off Antitrust Alarm Bells

 

FCC approval of the spectrum sale is likely. It's very similar to the deal AT&T made to buy spectrum from Qualcomm earlier in 2011, which the FCC approved in October. There's nothing particularly remarkable about this sale, except that it takes Cox out of the realm of wireless operators, but it had already removed itself from that realm anyway.

Now, contrast this with AT&T's fumbled attempt to buy T-Mobile by claiming it was a spectrum deal. Had it really been about spectrum, AT&T could have purchased spectrum from companies such as Cox when their plans changed, just as it did from Qualcomm. Had AT&T chosen this route, it would have cost far less than the $39 billion price tag that it was offering to pay for T-Mobile. Its chances of success would have been much higher, and it probably would have already been using that spectrum instead of finding itself in the nether world of "could of, should of, would of."

So now, Verizon Wireless grows even bigger, has access to more customers, and manages to do all of this without breaking the law or even raising too many eyebrows. While it remains to be seen how useful it becomes to sell each other's products, it does give Verizon something to sell for customers who can't-and probably never will-get FiOS. It also gives Cox a way to offer wireless products and services, which is something that never really got off the ground with Sprint.

While there are critics who see something nefarious in this deal, I don't see it. For one thing, the deal is too limited for it to mean anything as sweeping as critics claim. For another thing, none of the companies involved seems to be overreaching. Cox is simply selling something it doesn't need to Verizon Wireless, which needs it. While there is a joint sales agreement, it doesn't seem to be giving either company a major market advantage. In fact, I'm not convinced it's going to do a lot for either company's bottom lines.

Cox's Smith sees it on a more positive note. "This gives us the ability to meet the wireless demand of our customers," he said. "Our intention is to offer our customers their full spectrum. The benefit is that customers can get it all from one place. [Verizon] would sell Cox products and services in their sales channels, and we would sell Verizon in our channels."

Now, imagine how it might have been if AT&T had conducted business in the same way.