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Full Speed Ahead for Verizon and Cable

The Justice Department has given the go-ahead to a very interesting transaction between Verizon Wireless and the cable companies, with certain conditions. The government’s review followed the template we suggested in the comments we filed with the FCC in February, where the spectrum transaction and the other arrangements were evaluated separately. While the FCC is tasked with reviewing the spectrum transaction, the commercial arrangement was examined by Justice. Commentary by left interest groups focuses on the resale agreements between Verizon Wireless and the cable companies and ignores the much more interesting joint venture to develop intellectual property. This is a strange omission because the joint venture (“JOE LLC”) figures very prominently in the DoJ review, with its own set of conditions attached.

The long and short of the transaction is:

  • Verizon will be allowed to purchase the licenses to 20 MHz of nice AWS spectrum currently held by the cable companies, except in markets where Verizon seems to be well provisioned for the time being and T-Mobile is less well provisioned; in these cases, T-Mobile will gain licenses.
  • Cable and Verizon Wireless will be able to resell and bundle
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