Verizon Communications Inc. (NYSE:VZ) got the final approval with conditions from the United States Federal Communications Commission(FCC) to acquire wireless spectrum licenses from four major operators including Comcast Corporation (NASDAQ:CMCSA) (NASDAQ:CMCSK), Time Warner Inc. (NYSE:TWX), Bright House Networks, and Cox Communications. Verizon will now be able to close the transaction with the cable networks.
The FCC approved the $3.9 billion transaction after Verizon Communications Inc. (NYSE:VZ) accepted the conditions provided by the agency. One is to complete its commitment with T-Mobile that it will transfer some of its unused wireless spectrum within 45 days after closing its deal with the cable operators to maintain competition.
Verizon Communications Inc. (NYSE:VZ) also agreed to offer advance wireless services to at least 30 percent of populated areas covered by the airwave licenses within 3 years, and at least 70 percent within 7 years.
The largest wireless communications provider further agreed to continue to offer data roaming services with fair rates to its competitors, in areas covered by its newly acquired airwaves licenses within 5 years.
According to FCC Chairman Julius Genachowski, Verizon’s deal to buy the unused airwave licenses from the cable networks posed “serious anti-competitive concerns.” He said the issues were resolved with Verizon’s acceptance to the conditions set by the agency and the valuable wireless spectrum will be utilized, while preserving broadband competition for the benefit of the consumers and the economy.
The acquisition of the airwave licenses is significant to Verizon because it has impact on its wireless service offerings to consumers in terms of reach, speed, and strength. According to Verizon Communications Inc. (NYSE:VZ), it will deploy additional LTE capacity, using the wireless spectrum it will acquire from the cable networks.
Dan Mead, president and chief executive officer of the Verizon said, “This purchase represents a milestone in the industry and we appreciate the FCC’s diligent work to review and approve the transaction. We will work aggressively to ensure that we put this previously unused spectrum to use quickly to benefit customers.”
Earlier this month, the Department of Justice also gave Verizon its approval, but it negotiated the duration and scope of the company’s commercial agreements with the cable operators until 2016. The DOJ prohibited the company from selling cable services in areas with FiOS services and to bundle its DSL with satellite television services.
