FCC Concludes Review of Verizon Wireless-SpectrumCo Deal and Approves Related Spectrum Transactions

The Federal Communications Commission has concluded its review of the Verizon Wireless-SpectrumCo deal and approved four significant spectrum transfer applications involving Verizon Wireless, subject to a number of binding commitments and conditions.

The applications include, among other things, the assignment of AWS-1 licenses held by Cox and SpectrumCo (a joint venture among subsidiaries of Comcast, Time Warner Cable, and Bright House Networks) to Verizon Wireless; a spectrum “swap” between Verizon Wireless and Leap; and Verizon Wireless’s net assignment of AWS-1 licenses to T-Mobile. The Order imposes as conditions the following four voluntary commitments made by Verizon Wireless:

Divested Spectrum

• Verizon Wireless must close its proposed spectrum transfer with T-Mobile within 45 days of its closing of the SpectrumCo, Cox, and Leap transactions.

Buildout

• Within three years, Verizon Wireless will provide signal coverage and offer service to at least 30 percent of the total population in the Economic Areas or the portions of Economic Areas in which it is acquiring AWS-1 license authorizations (calculated by summing the population for each of these areas); and
• Within seven years, Verizon Wireless will provide signal coverage and offer service to at least 70 percent of the population in each Economic Area in which it is acquiring AWS-1 license authorizations, or, where a portion of the Economic Area is acquired, to at least 70 percent of the population of the total acquired portion of the licensed Economic Area.

Roaming

• In the event the current data roaming rule is not available to requesting providers, Verizon Wireless will continue to offer roaming arrangements for commercial mobile data services on any of its spectrum in the areas where it is acquiring AWS-1 spectrum to other commercial mobile data service providers on commercially reasonable terms and conditions, and providers may negotiate the terms of their arrangements on an individualized basis. This commitment will remain in place for five years following the date of the Commission’s order.

Reporting

• Verizon must provide on a semi-annual basis, subject to an appropriate protective order, reports concerning trends in DSL subscribership following the implementation of the commercial agreements.

Comcast’s Executive Vice President and Chief Diversity Officer David Cohen writes that conditions on the transaction adopted by the Department of Justice and the FCC preserve “the most important goals of our agreements”:

• Comcast will be able to market Verizon Wireless products and services across our entire footprint under a renewable agent agreement (for the first five years, we will be exclusive to Verizon Wireless, but Verizon Wireless will not be able to enforce the exclusivity provisions after five years).
• Comcast and Verizon Wireless will be able to work together for at least five years in an R&D partnership to develop innovative technologies that integrate wireless and wireline products and services; after five years, we can continue that partnership with the agreement of the DOJ.
• Comcast has the right to opt into an MVNO (or reseller) agreement with Verizon Wireless at any time after six months' notice.
• Verizon Wireless will be able to market Comcast products and services throughout the vast majority of the Comcast footprint (everywhere outside the FiOS footprint) under a renewable agent agreement; after five years, Verizon Wireless can renew the agreement other than in the DSL footprint where DOJ approval is required.