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December 20, 2011

Verizon under US Justice Dept scanner over spectrum deal

Carefully scrutinising the deal for effects on consumer choice and competition

By CBR Staff Writer

The Justice Department is probing Verizon Wireless’ marketing deal to buy wireless airwaves from cable operators and let them resell its mobile service, the department announced.

Verizon’s recent purchase of wireless spectrum worth $3.6bn, covering about 260 million US residents, from SpectrumCo, a joint venture among Comcast, Time Warner Cable and Bright House Networks, is also likely to be reviewed by the DOJ.

The agreement also includes a marketing deal in which Verizon and the cable companies would cross-promote products.

It was confirmed by Gina Talamona, a Justice spokeswoman, that antitrust officials are reviewing the transaction.

A Verizon spokesman said that they have received no information on which to comment.

It is reported that some public interest groups have insisted that the DOJ and the FCC carefully scrutinise the deal, for effects on consumer choice and competition.

But Justice officials perceive that the communications and tech markets converge and are apprehensive therefore about the cross-marketing deal that was announced in conjunction with the spectrum purchase, according to a person familiar with this case.

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