Following the confirmation earlier this month that Verizon was set to purchase the spectrum assets from the ultimately failed SpectrumCo venture headed by cable companies, the Department of Justice is now set to look over the purchase details with additional scrutiny due to the conditions of the deal which meant that cable companies such as Time Warner would begin reselling Verizon Wireless services next year following the completion of the sale according to Reuters.
As the intention behind SpectrumCo was to set up a CDMA 3G and an eventual 4G network to compete against the incumbent operators and offer bundled services under one company, the sale of the assets to Verizon while being allowed to resell those cellular services was initially interpreted as the cable companies looking for an easy out after deciding not to proceed with planned network buildouts.
As scrutiny in the wireless industry has increased substantially following the fallout from the failure of the AT&T/T-Mobile merger, Â the new probe centers around the aforementioned resale and marketing deal that the cable companies initially agreed to and whether it constitutes an actual gain for consumers, with unnamed anti trust sources stating the following:
Â “Comcast has decided not to compete and is handing spectrum over to Verizon, they decided to halt the buildout. Instead of us seeing facilities-based competition, it appears that we’re seeing collaboration.”
With increased attention paid to the wireless industry, spectrum deals will be less likely to be easily approved at the same time that AT&T and Verizon are scrambling to buy as much as possible to ease the increasing strain on data networks from the adoption of smartphones and other devices, with more companies cutting deals wherever possible. Verizon has officially submitted its bid to buy the SpectrumCo holdings to the FCC as of yesterday while announcing a smaller purchase deal with Cox Communications on Friday.