Verizon Deal with Four Cable Companies Approved by Justice Department
Communications and entertainment provider Verizon (NYSE: VZ) has received federal approval on a deal with four cable companies. The authorization was revealed Friday, despite the fact that the deal could potentially reduce consumer choices and increase prices for internet, phone and television services.
Verizon has had a busy week. On Wednesday, the wireless provider and Samsung announced the latest addition to the Samsung Galaxy Tab portfolio, the Samsung Galaxy Tab(R) 2 (7.0), now available in Verizon Wireless Communications Stores and online. Galaxy Tab 2 customers will have access to the Verizon Wireless 4G LTE network, which covers more than 75 percent of the U.S. population and will soon be available in more than 400 markets nationwide.
On August 3, Benzinga reported that Verizon has been fighting an uphill battle when it comes to purchasing spectrum from companies slated to become competitors. Now, Reuters has claimed that the famous mobile device retailer will have to bend over backwards to finalize deals with the likes of Comcast (NASDAQ: CMCSA) and Time Warner Cable (NYSE: TWC).
Monopolizing the wireless and cable industries has also become a slight concern as Verizon and Comcast dominate each, respectively. While new and improved technology would likely come from joint ventures between the two, antitrust regulators do not look fondly upon cross-marketing and promotion between the two giants.
However, the Justice Department appears to be less concerned about a potential monopoly. Friday's approval serves as a statement that the government cannot do much to reduce rapidly rising telecommunications bills.
According to The Washington Post, conditions have been imposed on the $3.6 billion deal, but they seem fairly superficial. The details of the deal aim to preserve competition in areas where Verizon's FiOS service already competes with cable services such as Comcast's Xfinity for customers. However, that is not the case in much of the U.S.
Due to lacking competition, millions of customers are given no real choice in terms of service providers. As a result, they are left with a "pay or suffer" situation, but Federal officials felt that could not block the deal in good conscience because the companies are in different businesses.
On Friday morning, Verizon traded at about $44.10, down roughly 0.15 percent.
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