Most significantly, the agency said it will not allow Verizon Wireless stores to sell TV and broadband services from the cable companies — Comcast, Time Warner Cable, Bright House Networks and Cox in areas where Verizon sells its own TV and broadband service.
When it comes to home broadband, Verizon Communication Inc.’s FiOS provides the only significant competition to cable in many areas. Yet FiOS is costly to build out, and Verizon’s commitment to the technology has faltered. Consumer groups who opposed the deal between the cable companies and Verizon said it showed that Verizon was further giving up on FiOS and yielding the home broadband market to cable.
The Justice Department agreed, saying the agreements would harm competition by reducing incentives to compete, resulting in higher prices and lower quality for the public.
Verizon Wireless announced deals to buy spectrum from the cable companies late last year. Analysts called it an epochal deal between companies that have been enemies for decades. In total, Verizon Wireless is paying $3.9 billion for the spectrum, which will allow it to add capacity to its high-speed “4G LTE” wireless broadband network.
Regulators saw the transfer of the unused spectrum to Verizon as a positive one for consumers. It was the co-marketing agreements, signed at the same time, which raised concern.
Apart from limiting the areas where Verizon Wireless stores can sell cable, the agreement between the parties and the Justice Department puts a five-year limit on the co-marketing agreement in other areas. After that period, the parties can apply to extend the deal, said the acting assistant attorney general for the antitrust division, Joseph Wayland.
Comcast, the country’s largest cable company, said it was pleased with the outcome of the Justice Department’s review.