US Justice Dept probing Verizon deal with cable companies

WASHINGTON Wed Dec 21, 2011 3:49am IST

Customers wait in line outside a Verizon Wireless store in New York to buy the iPhone 4 shortly after the phone went on sale with Verizon service in New York, February 10, 2011. REUTERS/Mike Segar/Files

Customers wait in line outside a Verizon Wireless store in New York to buy the iPhone 4 shortly after the phone went on sale with Verizon service in New York, February 10, 2011.

Credit: Reuters/Mike Segar/Files

Related Topics

Stocks

   
A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

WASHINGTON (Reuters) - The Justice Department is probing Verizon Wireless' multi-billion dollar deal to buy wireless airwaves from cable operators and let them resell its mobile service, the department said on Tuesday.

Under the agreement, which was reached on December 2, Verizon Wireless will pay top U.S. cable providers $3.6 billion for the spectrum.

The review follows the Justice Department's review and opposition to AT&T Inc's (T.N) $39 billion plan to buy T-Mobile USA - a deal AT&T gave up on this week.

The agreement, with a consortium that includes Comcast Corp (CMCSA.O) and Time Warner Cable Inc (TWC.N), puts new pressure on Verizon rivals Sprint Nextel Corp (S.N) and AT&T, which still needs more spectrum after ending its T-Mobile USA bid.

"My understanding is that it's the deal that we're looking at. We're looking at the proposed deal," said Justice Department spokeswoman Gina Talamona, who declined to outline any specific concerns the Justice Department had.

The deal was problematic because of the marketing arrangement, according to an antitrust source who is a veteran of the Justice Department.

"Comcast has decided not to compete and is handing spectrum over to Verizon," the source said. "They decided to halt the buildout. Instead of us seeing facilities-based competition, it appears that we're seeing collaboration."

Comcast declined comment, although a source close to the transaction said that paperwork for the antitrust review had not yet been filed.

A spokesman for Verizon said his company had not received any information on which it could comment.

Both Verizon Wireless and AT&T, the No. 1 and No. 2 U.S. mobile providers, have said they need more spectrum to support increased consumer demand for videos and other services that soak up bandwidth.

Verizon Wireless is owned by Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L). T-Mobile USA is owned by Germany's Deutsche Telekom AG (DTEGn.DE).

(Reporting By Diane Bartz; editing by Andre Grenon)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Tech for health

Reuters Showcase

Wearable Gadgets

Wearable Gadgets

Swatch prefers go-it-alone route for smartwatch plans.  Full Article 

Google Drones

Google Drones

Google tests drones for deliveries.  Video 

New iPhone

New iPhone

Apple working with NXP for pay-by-touch technology in new iPhone - FT.  Full Article 

Legal Case

Legal Case

Bitcoin promoter to plead guilty to unlicensed money transmission.  Full Article 

Online Crackdown

Online Crackdown

China's Tencent shuts messaging accounts after censorship rules - state media.  Full Article 

Hot Commodity

Hot Commodity

Data scientists are increasingly becoming important to the world's tech companies.  Video 

Agriculture App

Agriculture App

CME Group smartphone game lets students "beef up" on ag economics.  Full Article 

Copyright Dispute

Copyright Dispute

Oracle loses bid to restore $1.3 bln SAP verdict, could get new trial  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage