FCC Votes to Approve Verizon Wireless-Cable AWS License Transfers
The FCC voted to approve a series of spectrum transactions involving Verizon Wireless and some of the largest cable operators, as was expected (CD Aug 17 p1). All five commissioners approved the deal, though Republicans Robert McDowell and Ajit Pai approved in part and concurred in part (http://xrl.us/bnmxe5). “Two of my colleagues disagree with important elements of the Commission’s order,” Chairman Julius Genachowski acknowledged in a statement that was released along with the order. They opposed the FCC’s roaming-related conditions and the agency’s assertion of authority over the commercial agreements between Verizon Wireless and the cable operators, they each said in their statements.
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But those conditions were critical to gaining support from the Democrats on the commission, the Democrats said in their statements. “As initially proposed, the FCC could not have found the transactions to be in the public interest,” Commissioner Mignon Clyburn wrote. “By obligating Verizon Wireless to live by the Commission’s data roaming rules regardless of the outcome of its pending litigation to upend those rules, we have taken an important stand for competitive carriers across the nation.” She would have gone even further in setting conditions on the commercial agreements between Verizon and SpectrumCo and Cox Communications, Clyburn said. “A condition would have been appropriate to ensure that the [Joint Operating Entity] JOE or any of the commercial agreements could not include video programming and over-the-top Internet video programming.” SpectrumCo’s members are Comcast, Time Warner Cable and Bright House Networks. The venture agreed in December to sell 122 advanced wireless services licenses to Verizon Wireless for about $3.6 billion, and Cox around that time agreed to sell 30 AWS licenses for about $300 million.
Verizon Wireless will be required to offer data roaming in areas where it’s acquiring AWS-1 licenses in the deal, even “in the event the current data roaming rule is not available to requesting providers,” the FCC said. The order also called for Verizon Wireless to complete its proposed spectrum transfers with T-Mobile within 45 days of closing its SpectrumCo, Cox and Leap deals. The approval of the deal also means Verizon Wireless can move forward with the sale of its 700 MHz A- and B-block licenses (CD April 19 p1), the order said. “We expect a very robust sales process as more than 65 parties have requested and received information about the spectrum we are selling,” Dan Mead, Verizon Wireless CEO, said in a news release.
Comcast praised the FCC for approving the deal. Comcast will still be able to market Verizon Wireless’s products across its entire footprint, David Cohen, its executive vice president, wrote on the company’s blog. Additionally, it can still opt into an mobile virtual network operator agreement after six months and it can work with Verizon Wireless on new technology.
Free Press also praised the FCC for taking up many of its concerns but criticized the build-out requirements associated with the transaction. “The build out requirements Verizon agreed to are laughable,” said Joel Kelsey, Free Press’s policy adviser. “Seven years is too long for rural and suburban customers to wait for quality mobile broadband service,” he said. “The true value Verizon finds in these licenses is the ability to prevent use of this spectrum by its competitors."
The Communications Workers of America criticized the FCC for what it said was acting “on behalf of corporate interests, not the public interest and clearly not jobs.” The union called the conditions on the deal weak and said the government did a bad job explaining how the conditions will be enforced. Consumers Union Policy Counsel Parul Desai said some of the organization’s concerns with the deal remain despite the conditions. “What is really troubling ... is the continued trend of decreasing competition in the telecommunications marketplace and the rise of wireless duopolies and regional cable monopolies,” she said. “It is time that we start finding ways to bring competition back to the market, rather than limiting the consequences of less competition.”