Verizon (VZ) Lower as $3.6B Spectrum Deal Faces Federal Scrutiny (CMCSA) (T)
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Verizon is trading lower Monday, amid reports its deal to acquire specturm from Comcast's (Nasdaq: CMCSA) SpectrumCo joint venture is coming under federal scrutiny.
According to the NY Post, the $3.6 billion deal is being investigated by the U.S. Department of Justice and the Federal Communications Commission for compliance with antitrust law.
The Post cited sources who have said the deal probably won't get through without some conditions attached. The main issue is that Verizon can already deploy its 4G network across the U.S. without the additional spectrum. Verizon is currently the number one wireless carrier in the U.S., and it's 4G LTE network covers about 200 million Americans (though Verizon has just 107.7 million wireless customers, according to last quarter's data).
Those following competition in the wireless market know that both the DoJ and FCC rejected AT&T's (NYSE: T) bid for T-Mobile for similar reasons, saying AT&T did not need T-Mobile to provide national service.
Under the deal, Verizon would pay $3.6 billion to SpectrumCo, LLC, a joint venture between Comcast Corporation (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), and Bright House Networks, to acquire its 122 Advanced Wireless Services spectrum licenses covering 259 million POPs. The deal also includes a marketing pact, where Verizon and SpectrumCo will agree to promote each others products.
Shares of Verizon are down about 1.4 percent.
According to the NY Post, the $3.6 billion deal is being investigated by the U.S. Department of Justice and the Federal Communications Commission for compliance with antitrust law.
The Post cited sources who have said the deal probably won't get through without some conditions attached. The main issue is that Verizon can already deploy its 4G network across the U.S. without the additional spectrum. Verizon is currently the number one wireless carrier in the U.S., and it's 4G LTE network covers about 200 million Americans (though Verizon has just 107.7 million wireless customers, according to last quarter's data).
Those following competition in the wireless market know that both the DoJ and FCC rejected AT&T's (NYSE: T) bid for T-Mobile for similar reasons, saying AT&T did not need T-Mobile to provide national service.
Under the deal, Verizon would pay $3.6 billion to SpectrumCo, LLC, a joint venture between Comcast Corporation (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC), and Bright House Networks, to acquire its 122 Advanced Wireless Services spectrum licenses covering 259 million POPs. The deal also includes a marketing pact, where Verizon and SpectrumCo will agree to promote each others products.
Shares of Verizon are down about 1.4 percent.
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