Verizon's purchase of LTE spectrum from a cable consortium along with the sale of Advanced Wireless Service spectrum to T-Mobile is approved, but with two Federal Communications Commission members expressing doubt about portions of the order.
The Federal Communications Commission has approved
of previously unused wireless spectrum owned by a group of cable
companies to Verizon. The FCC also approved the sale of a portion of the
spectrum to T-Mobile and Leap Wireless in a complex deal that involved a
consent agreement between the cable companies and the U.S. Department of
The DoJ consent agreement put strict controls on the
between Verizon and the cable companies that would have
prevented the companies from competing with each other in terrestrial Internet
delivery and in joint marketing agreements. The commercial agreements were
initially combined into a single, very complex transaction. However, the Justice
Department and the FCC agreed to split consideration of those agreements and
the spectrum sale into separate actions.
All five FCC commissioners voted to approve the sale of the spectrum to
Verizon, T-Mobile and Leap Wireless, makers of the Cricket line of prepaid
phones on Aug. 23. However, two commissioners, Robert McDowell and Mignon
Clyburn, withheld approval of the commercial agreements, saying that control
over the agreements exceeded the FCC's authority. However, both of those commissioners
concurred with the spectrum transfers in light of the DoJ consent decree.
FCC Chairman Julius Genachoswki said that Verizon had
worked with the FCC and the Justice Department to satisfy the concerns of the commissioners as well as the concerns of several public interest groups that
had opposed the spectrum sale. Genachowski took note of Verizon's cooperation.
"In particular, Verizon Wireless has committed to
offering data roaming to its competitors and consumers. Roaming obligations
have helped fuel competition, investment and consumer choice in America's
wireless marketplace since the first cellular voice service in 1981,"
Genachowski said in a statement included in the order. "Consistent with the Commission's
2011 Order extending the basic roaming framework to mobile broadband, Verizon's
enhanced roaming commitments will help ensure that consumers, particularly in
rural areas, have more choices and are not denied access to affordable mobile
Genachowski noted that the sale would advance
the leadership of the U.S. in LTE deployment
."In connection with the FCC's review, Verizon Wireless
has also undertaken an unprecedented divestiture of spectrum to one of its
competitors, T-Mobile, and has committed to significantly accelerate the
build-out of its new spectrum," Genachowski said.
The FCC order includes some unusual provisions. It
requires Verizon to transfer the spectrum it sold to T-Mobile
within 45 days of
completing the purchase with the cable companies. In addition, the FCC has placed
a series of deployment requirements and reporting requirements on Verizon to
ensure that the spectrum that was just purchased does not go unused. In
addition, the FCC placed requirements regarding allowing roaming on its network
by customers of other carriers, and it placed reporting requirements regarding
roaming and regarding DSL service and other landline broadband use.