Verizon, T-Mobile, Cable Consortium Spectrum Deals Win FCC Approval

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 the sale 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 Justice.

The DoJ consent agreement put strict controls on the commercial agreements 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 broadband services."

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.