FCC approves Verizon’s controversial spectrum purchase from cable companies

Following the Department of Justice’s lead last week, the FCC has now approved Verizon’s acquisition of a large swath of AWS spectrum from a consortium of cable companies operating as SpectrumCo that includes Comcast and Time Warner. As with the DoJ, the FCC’s approval specifies “a number of binding commitments and conditions” including a spectrum swap of certain licenses between Verizon and Leap (better known in the market as Cricket) and a transfer of certain AWS holdings to T-Mobile upon completion of the purchase. In fact, the Commission says in its final report that the approval was based largely on “unprecedented divestiture of spectrum to a competitor, T-Mobile.”

Details of the approval also reveal that the FCC is requiring Verizon to utilize at least 30 percent of the acquired AWS spectrum (by population) within three years and 70 percent within seven years. The most controversial portion of the deal, though, are the associated commercial agreements that allow cable companies involved in the sale to cross-market services with Verizon, an agreement that had regulators concerned about a reduction in landline broadband competition in some markets — to that end, the FCC’s requiring semi-annual reports on “trends in DSL subscribership,” while the DoJ had already stipulated that no tie-ups could proceed in established FiOS markets.