FCC clears Verizon's 700MHz buy with no concessions to Google

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FCC clears Verizon's 700MHz buy with no concessions to Google

By CAROLINE GABRIEL

Published: 19 November, 2008

READ MORE: Spectrum | Google | Verizon | Regulation

Compared to most regulators round the world, the US FCC has struck a strong blow for open access, by mandating openness on Verizon Wireless' national chunk of 700MHz spectrum, rather than leaving matters entirely to the market. However, open internet lobbyists like Google do not think the FCC has gone far enough, and have accused Verizon of merely paying lip service to the change. They failed to have their concerns addressed by the agency's latest ruling however, since the FCC cleared Verizon's $4.7bn purchase of its nationwide collection of regional licenses without additional conditions, refusing Google's request to impose stronger open access safeguards.

The path is now clear for Verizon Wireless to complete its $28bn acquisition of Alltel - making it the largest US cellco - and of the 700MHz C Block licenses. As well as Google's campaign, some Verizon competitors had claimed that its purchase of the new spectrum exceeded the FCC limit of 95MHz per carrier, in 17 markets. However, although Verizon still has to divest 10MHz in a New Jersey market as a condition of the Alltel deal, the FCC ruled that the newly acquired licenses "would not pose competitive harm" in the 17 locations.

The agency also changed a key element of its merger review process. In future, it will count spectrum won at auctions towards the 95MHz limit. In recent merger rulings (including this latest Verizon decision), the FCC has not factored spectrum acquired at auctions into the 95MHz screen because winning bidders have been unable to secure the frequencies immediately.

The two Democrat Commissioners, Michael Copps and Jonathan Adelstein, welcomed this change. "Until today, the Commission applied its spectrum screen to licenses obtained via merger or acquisition, but not to licenses acquired via auction. As we have stated before, this double standard makes no sense," they said in a statement. Before 2003, there was a hard cap at 55MHz, but this was replaced by the more flexible spectrum screen system, and the 75MHz limit, in that year. A Democrat controlled FCC may look to revive the more rigid rule.