Judge Approves Verizon Deal Averting Monopoly

     (CN) – A federal judge signed off on a final judgment that will allow Verizon to control an even greater percentage of the wireless broadband spectrum.
     In December 2011, Verizon Wireless cut a $3.6 billion dollar deal with cable providers Comcast Corp., Time Warner Cable, Bright House Networks and Cox Communications that will allow it to bundle wireless services with cable packages. Verizon markets the bundled service as Verizon FiOS.
     The cable providers also agreed to sell Verizon their unused wireless spectrum licenses.
     Federal regulators intervened, however, claiming the deals could stifle competition.
     Filing a complaint and final judgment simultaneously, the Justice Department said approval of the deals hinged on Verizon’s agreement to a set of restrictions.
     U.S. District Judge Rosemary Collyer in Washington approved the final judgment Friday, finding that it “sufficiently remedies the anticompetitive impact of the defendants’ commercial agreements; and that entry of the proposed final judgment is in the public interest.”
     “The proposed settlement forbids Verizon Wireless from selling cable company products in FiOS areas and removes contractual restrictions on Verizon Wireless’s ability to sell FiOS, ensuring that Verizon’s incentives to compete aggressively against the cable companies remain unchanged,” the Justice Department said in a statement last year. “In addition, under the proposed settlement, Verizon Wireless’s ability to resell the cable companies’ services to customers in areas where Verizon sells DSL Internet service ends in December of 2016 (subject to potential renewal at the department’s sole discretion), thereby preserving Verizon’s incentives to reconsider its decision to stop building out its FiOS network and otherwise innovate in its DSL territory.” (Parentheses in original.)
     Objectors said that allowing Verizon to still advertize its cable services in areas where their sale is prohibited undermines the judgment, but Collyer disagreed.
     She also rejected objections that claimed the joint operating agreement between Verizon and the cable providers will lead to technological innovations that will become industry standard because of the large size of the service providers.
     Objectors asked Collyer to add “a requirement that the products developed by the JOE [joint operating agreement] shall be made available to other wired broadband providers on a reasonable and nondiscriminatory basis,” but Collyer said this issue was not included in the complaint and therefore not reviewable.
     “The court concludes that the proposed final judgment is in the public interest,” Collyer said.

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