Verizon Hit With DOJ Investigation Over Spectrum Deals With Cable Companies

Department Of Justice

Now it’s Verizon’s turn in the government spotlight. The U.S. Department of Justice plans to look into the recent deals that the wireless company has cut with several cable companies in order to obtain wireless spectrum, according to a report.

Bloomberg reported that Verizon will have to further explain its deals with Comcast (NSDQ: CMCSA), Time Warner Cable (NYSE: TWC), Bright House Networks, and Cox for wireless spectrum in exchange for resale agreements and billions in cash. Bloomberg quoted a representative of the Consumer Federation of America saying that the deal “is diminishing competition in every way,” but also published the views of a telecom policy analyst who expects the DOJ and Federal Communications Commission to eventually let this deal pass.

Perhaps turnabout is only fair play for Verizon, currently chuckling over the failure of rival AT&T’s bid to purchase T-Mobile and become the leading wireless company in the U.S. But Verizon’s approach to acquire more spectrum–everybody wants more spectrum–is quite different from AT&T’s, considering that Verizon’s moves don’t eliminate any serious consumer wireless companies from the market.

Cox had already decided to get out of the wireless business, and fewer and fewer people are interested in buying wireless service from a cable company that don’t have access to smartphones. Verizon may have to sell off portions of its spectrum assets in certain markets, but it seems like any restrictions would be far less strict than what the government was likely to require from AT&T (NYSE: T) and T-Mobile.

Comments have been disabled for this post