The Federal Communications Commission on Thursday said it had formally approved Verizon Wireless' proposal to purchase $3.9 billion of airwaves from big cable providers.
As part of the approval, the FCC put in place measures to accelerate deployment of Verizon Wireless' newly acquired airwaves from Comcast Corp, Time Warner Cable Inc and others.
The agency concluded its review after the Department of Justice cleared the way last week for the deal to move forward, with constraints on marketing agreements attached to the deal. At that time, FCC Chairman Julius Genachowski said he expected his agency would OK the purchase.
The Justice Department brokered changes to Verizon Wireless' commercial agreements with the cable companies under which they planned to market each other's services and form a technology joint venture.
Those changes, the FCC said, alleviated concerns about anti-competitive behavior and risks to both wireless competition and the future buildout of Verizon's competing FiOS cable service.
The FCC also said Verizon Wireless agreed to accelerate the buildout of its spectrum from cable operators, and will have to offer data roaming at reasonable rates as part of the FCC's conditions for approval.
Verizon Wireless, the top U.S. wireless carrier, is a joint venture of Verizon Communications and Vodafone Group Plc.
"The transaction will preserve incentives for deployment and spur innovation while guarding against anti-competitive conduct. And vitally, it will put more than 20 megahertz of prime spectrum - spectrum that has gone unused for too long - quickly to work across the country, benefiting consumers and the marketplace," Genachowski said.
Within three years, Verizon Wireless will have to provide coverage for at least 30 percent of the people covered by the spectrum it is buying, and extend that coverage to at least 70 percent within seven years.
"We will work aggressively to ensure that we put this previously unused spectrum to use quickly to benefit customers," said Dan Mead, president and chief executive officer of Verizon Wireless.
Verizon Wireless alleviated some regulatory concerns by agreeing in the last few months to sell some spectrum, including a deal it forged with Deutsche Telekom AG unit T-Mobile USA, which was originally the most outspoken opponent to Verizon's deal with the cable companies.
The agency said that the spectrum sale to T-Mobile must close within 45 days of the close of the cable spectrum deal.
Comcast executive vice president David Cohen said he expected the transaction to close shortly, adding that the deal was a smart way for the No. 1 cable operator to deliver wireless services.
The conditions the Justice Department placed on the commercial agreements are subject to a 60-day comment period and require court approval before the companies can close the deal.
(Reporting by Jasmin Melvin; Additional reporting by Sinead Carew in New York; Editing by Gary Hill and Kenneth Barry)