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August 17, 2012

US DOJ approves Verizon Wireless’ $3.9bn wireless spectrum deal

The purchase of spectrum will allow Verizon to add capacity to its 4G LTE wireless broadband network

By CBR Staff Writer

The US Department of Justice (DOJ) has approved the Verizon Wireless’ deals worth $3.9bn to purchase wireless spectrum owned by Comcast, Time Warner Cable, Bright House Networks and Cox Communications, but has applied conditions to the deal.

According to Verizon, the purchase of spectrum will allow it to add capacity to its high-speed "4G LTE" wireless broadband network.

As per the conditions, that were applied to guard consumers from reduced competition and higher prices, Verizon Wireless would not be allowed to sell TV and broadband services from the spectrum owned cable firms, in the region where the company sells its own TV and broadband service.

US DOJ Antitrust Division assistant attorney general Joseph Wayland said by limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with theirspectrum acquisitions, the department has provided the right remedy for competition and consumers.

"The Antitrust Division’s enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape," Wayland said.

Further, the spectrum purchase allows Verizon to increase its wireless data network, while also enabling the cable partners to market their services in Verizon’s stores.

According to the company, the agreements are expected to accelerate the way to cellphone, cable, Internet and home phones appearing on a sole monthly bill.

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Excluding limited areas where Verizon Wireless stores can sell cable, the agreement places a five-year limit on the co-marketing agreement in other areas, upon completion of which, the parties are allowed to extend the tenure of the deal or receive a non-exclusive license.

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