It looks as though Verizon's cable spectrum deals won't fly under the radar after all.
U.S. Department of Justice spokeswoman Gina Talamona told Bloomberg Tuesday that the DOJ is taking a look at Verizon's recent agreements to buy wireless spectrum licenses from multiple cable companies to see if they violate antitrust law. In particular the DOJ will look into whether the deals are giving Verizon too much control over wireless spectrum that will be used to build and operate 4G LTE networks. Verizon so far has declined to publicly comment.
Since the $39 billion AT&T/T-Mobile merger collapsed this past month after both the DOJ and the Federal Communications Commission came out against it on antitrust grounds, it's not too much of a stretch to think that those agencies would provide similar scrutiny to Verizon's spectrum acquisitions. In the case of the AT&T/T-Mobile merger, both the DOJ and the FCC contended that such a merger would irrevocably harm competition within the wireless industry, as the newly merged company would form a virtual duopoly with Verizon that would have controlled an estimated 80% of the U.S. wireless market.
Verizon's deals with cable companies had gained relatively little scrutiny at first since they were struck right around the time that AT&T's proposed merger with T-Mobile fell apart. Earlier this month Comcast, Time Warner and Bright House agreed to sell Verizon 122 AWS spectrum licenses that covered 259 million POPs for $3.6 billion. Verizon subsequently worked out a similar deal with Cox Communications involving $315 million in licenses for 20MHz of AWS spectrum. Verizon Wireless CEO Dan Mead has said the spectrum purchase "solidifies our network leadership into the future" and would allow Verizon to deliver better 4G LTE services to its users.
Both wireless carriers and the FCC have made freeing up more mobile spectrum a major priority to help meet demands for mobile data on 4G networks. The FCC last year projected that growth in wireless data demand will lead to a "spectrum deficit" of 275MHz if no new spectrum is released by 2014. There is currently 547MHz of spectrum available for dual use in mobile voice and data services.
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