The US Justice Department is currently investigating Verizon Wireless with regards to the cable spectrum deals it made with several cable companies. The agency wants to know whether the deal could hurt the competition in the wireless and cable industries.
The spokeswoman of the antitrust division of the Justice Department declined to comment on the issue. Verizon Wireless is the largest mobile phone carrier in the United States. It recently signed a deal earlier this month with cable companies that would change how consumers buy mobile, Internet, and pay-tv services.
After the news came out, Verizon Communications shares dropped 1.2 percent before it climbed 0.7 percent to $39.32 in the New York trading. Verizon Wireless would buy spectrum so that it could be used for its Long Term Evolution network. Its competitor AT&T is also rolling out its LTE network.
Verizon Wireless dropped its bid to acquire T-Mobile USA. It said that it needs the additional airwaves so that it could improve the service because of the increase demand for digital data as consumers use their mobile devices more.
Verizon Wireless and the cable companies would market and sell each other service’s as part of the deal. Verizon would offer cable TV services in its retail stores and would get a percentage of the revenue for every subscriber that signs up.
