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DOJ orders changes in Verizon-cable deals to foster competition

The US Department of Justice (DOJ) [official website] announced Thursday that it will require Verizon [corporate website] and four cable companies to make changes in service agreements to ensure that the agreements do not suppress competition [press release]. In December, Verizon entered into an agreement with T-Mobile [corporate website] to transfer many of its wireless spectrum licenses to T-Mobile. At the same time, Verizon reached agreements with four cable companies—Cox Communications, Comcast,Time Warner Cable and Bright House Networks [corporate websites]—in which the companies agreed to sell each other's products. The DOJ declared that while it will allow the deals between Verizon and the cable companies to go forward, it will limit the scope and duration of the agreements. In the press release, DOJ Assistant Attorney General Joseph Wayland argued that the changes struck an appropriate balance between allowing businesses to act freely and protecting consumers from anti-competitive practices:

By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers. The Antitrust Division's enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape.
The Federal Communications Commission (FCC) [official website] is expected to review the transactions between Verizon and the cable companies.

Verizon has been involved in litigation with the federal government recently concerning new FCC net neutrality rules [text, PDF] that allow the government to regulate Internet traffic to preserve the Internet as a free and open platform of communication. In April 2011 the US Court of Appeals for the District of Columbia Circuit [official website] dismissed an appeal [JURIST report] by Verizon and Metro PCS [corporate website] challenging the net neutrality rules. Verizon filed its appeal in January 2011 arguing that the net neutrality rules gave the FCC more authority than Congress intended to give it [JURIST report]. The FCC approved the net neutrality rules [JURIST report] in October 2009.

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