Federal Communications Commission Chairman Julius Genachowski and the Justice Department have signed off on Verizon Wireless' plan to pay $3.6 billion for wireless spectrum controlled by Comcast and other major cable companies.
Genachowski will now urge the entire five-person commission to permit the transaction.
Verizon says it plans to use the spectrum to meet growing consumer demand for broadband data services. The growth of smartphones and other internet enabled devices have led to a spectrum crunch in recent years for technology companies.
Responding to concerns by Genachowski and the Justice Department, Verizon and the cable companies involved in the transaction — Comcast, Time Warner Cable and Bright House Networks — agreed to restrictions on how they can market each other’s video and broadband services in areas where they compete. Verizon also agreed to divest spectrum to one of its competitors, T-Mobile.
“I believe the Commission should now approve this transaction, and I will be circulating a draft order to my colleagues that would do so," Genachowski wrote.
He said the new agreements would "preserve Verizon's incentives to build out FiOS, increase wireless competition, and ensure that the proposed IP venture is pro-consumer and that its products cannot be used in anti-competitive ways."
The Justice Department also said the changes would provide "the right remedy for competition and consumers."
The public interest group Public Knowledge, however, said the companies should not be able to sell one another's products at all, because it contributes to a monopoly. The group is focused on intellectual property and freedom in the digital market.
"Policymakers can no longer pretend that the broadband market is competitive," said the group's president and CEO, Gigi B. Sohn. "Congress and the FCC should pursue new policies to stimulate competition in wireline internet access service–or resign themselves to regulating a broadband monopoly."
When Verizon announced plans for the spectrum acquisition last December, it said it and its cable industry partners had also agreed to sell each other’s products. Verizon also said the companies had formed a joint venture to develop wireless technology.
Consumer watchdog groups objected, saying the new partnerships would limit competition.