Verizon Wins Approval for Huge Spectrum Purchase

By AMY CHOZICK

Verizon Wireless won unanimous Federal Communications Commission approval to move forward with its $3.9 billion purchase of airwaves from the country's largest cable providers.

An F.C.C. panel voted 5 to 0 to allow Verizon Wireless to expand its wireless data networks by tapping into the mostly unused airwaves of Comcast, Time Warner Cable, Bright House Networks and Cox Communications. The Justice Department approved the agreement last week, but advised that certain adjustments in favor of consumers should be made.

In addition to the additional spectrum, which Verizon Wireless said it would use in its new fourth-generation Long Term Evolution (or 4G LTE) wireless network, the partnership enables the companies to market Verizon services and in some cases sell their own services in Verizon stores. Comcast, for instance, has already dispatched its sales force to Verizon Wireless stores in 21 markets. The cable company offer s wireless customers discounts and other incentives if they sign up for Comcast's phone, Internet and cable service.

“This purchase represents a milestone in the industry and we appreciate the F.C.C.'s diligent work to review and approve the transaction,” Dan Mead, president and chief executive of Verizon Wireless, said in a statement.

David L. Cohen, executive vice president of Comcast, said the deal was “a smart and efficient way for Comcast to deliver a broader array of wireless services, and is an efficient deployment of this spectrum.”

Over 370 markets and 75 percent of the United States population have access to Verizon Wireless' 4G LTE network. The additional spectrum will help Verizon, the No. 1 carrier, accommodate the growing demand for data on smartphones.

The agency's approval comes as the wireless industry has expressed increasing concerns that it is facing a spectrum crisis and that the current level of available airwaves will not accommodate the growing use of mobile devices.

Cable companies bought spectrum in 2006 with the hopes of eventually entering the wireless business, but in most cases the cost of building a retail footprint proved too high.

The Justice Department had initially worried that Verizon Wireless's spectrum transfer and cross-marketing arrangement would hinder competition and drive up costs. Regulators approved the transfer with suggestions of how the deal could avoid harming consumers.

But as Verizon and cable companies cheered the F.C.C.'s decision, some consumer groups said it cemented a couple of giant companies' dominance in wireless and broadband services.

“By allowing Verizon and the cable companies to sell each other's services, the D.O.J. and the F.C.C. are acknowledging what has been clear for some time - that broadband competition policy in the United States has failed,” said Gigi B. Sohn, president and chief exe cutive of Public Knowledge, a Washington-based nonprofit that promotes an open Internet.

Verizon Wireless said it would acquire the cable companies' spectrum shortly after government regulators rejected a $39 billion takeover bid by its chief rival, AT&T, for T-Mobile last year. After the abandoned AT&T deal, T-Mobile lobbied the F.C.C. to reject Verizon Wireless's bid for additional spectrum. T-Mobile said in an F.C.C. filing the deal was “unlikely to provide any near-term benefits to Verizon Wireless customers.

Amy Chozick is The Times's corporate media reporter. Follow @amychozick on Twitter.