Business

Verizon spectrum deal faces scrutiny

Verizon Wireless is getting regulatory static.

The Justice Department and the Federal Communications Commission are scrutinizing the wireless giant’s $3.6 billion deal to buy valuable spectrum from Comcast and its cable partners. Verizon plans to use the wireless licenses to build out its faster 4G network.

Sources close to the situation said Verizon is already facing a tough antitrust review and may have to make concessions to get regulatory approval.

“I think it will be a very close look,” said one source, adding, “I do not think it is a given it will get through without conditions.”

The source said one hangup is that is Verizon, the No. 1 wireless carrier, can deploy its 4G network across the country without the additional spectrum. Currently, Verizon has 4G LTE service that covers areas with more than 200 million Americans.

Meanwhile, smaller rivals such as T-Mobile, are spectrum starved, which is one reason why T-Mobile agreed last year to sell itself for $39 billion to AT&T, the second-largest carrier after Verizon. The same regulatory agencies objected to the proposed tie-up, arguing that AT&T did not need T-Mobile to provide national service.

As part of the deal, Verizon and Comcast, along with Time Warner Cable and Bright House Networks, struck a marketing pact under which they agreed to promote each other’s products.

Last week, the companies submitted their marketing agreement to the FCC even though they said regulators have never reviewed such pacts in the past — a sign that they were eager to appease regulators and avoid delays.

The DOJ and FCC declined to comment. Verizon did not respond to a request for comment.