Verizon’s slick spectrum salesmanship doesn’t persuade DOJ

In many ways, Verizon has gone about its attempts to acquire more LTE spectrum much more wisely than AT&T did with its failed T-Mobile merger. After all, Verizon is just purchasing spectrum licenses from companies that won’t be able to use them on its own anyway, rather than outright buying a rival wireless carrier. But that apparently hasn’t been enough to persuade the Department of Justice, as the Wall Street Journal reports that the DOJ has decided to hold up Verizon’s proposed deals to acquire AWS spectrum licenses from major cable companies such as Comcast and Cox for around $3.9 billion.

Citing unnamed sources, WSJ says that the Justice Department is concerned that the proposed deal “will hurt competition for broadband Internet service” and would be “in effect, an agreement not to compete for Internet users in each other’s territory.” The sources say the DOJ is highly unlikely to pass off on the proposed deal unless Verizon and the cable companies make significant changes that satisfy the agency’s concerns over anticompetitive behavior.
Previously, Verizon had tried to bolster its case that its spectrum deal would be pro-competitive by essentially buying out one of the deal’s former critics and agreeing to swap some of its AWS spectrum with rival T-Mobile. Under that deal, Verizon and T-Mobile would agree to swap licenses on the AWS band that spans from 1710MHz to 1755MHz for uplink and 2110MHz to 2155MHz for downlink to patch up weak spots in their LTE spectrum portfolios. For its part, T-Mobile says it “will gain spectrum covering 60 million people.”
http://www.bgr.com/2012/07/13/verizon-spectrum-deal-doj-block/

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