Thu Aug 16, 2012 12:21pm EDT
Aug 16 (Reuters) - U.S. regulators cleared the way on Thursday for Verizon Wireless to proceed with its $3.9 billion purchase of airwaves from big cable providers but said the companies would have to abide by several conditions to gain final approval.
Along with its spectrum purchase agreement, Verizon Wireless had also proposed controversial commercial agreements with the cable companies to market each other's services and to form a technology joint venture.
Verizon and rivals including AT&T Inc are hunting for more wireless airwaves to cope with increasing demand for data services such as Web surfing and video on cellphones.
While the U.S. Department of Justice said on Thursday that it had filed a lawsuit barring the companies from going through with their original commercial agreements, it also filed a proposed settlement that would resolve its concerns if the plan gains court approval.
The Justice Department is proposing that Verizon Wireless limits the scope and duration of commercial agreements it made with cable providers including Comcast Corp and Time Warner Cable Inc.
For example, the DoJ said its proposed settlement would forbid Verizon Wireless from marketing cable company products in areas where its parent company, Verizon Communications Inc , sells FiOS television and Internet services that compete with cable providers.
The DoJ said that in order to ensure Verizon's incentives to compete aggressively against the cable rivals are not reduced, it would allow Verizon Wireless to sell FiOS services in these markets.
The spectrum deal also needs approval from the U.S. Federal Communications Commission.
FCC chairman Julius Genachowski also said on Thursday that the commission should approve the deal since Verizon Wireless has made certain promises, including an agreement to sell some spectrum assets to Deutsche Telekom AG's T-Mobile USA unit.
The deal between No. 1 U.S. mobile provider Verizon Wireless and the country's biggest cable rivals had attracted opposition from rivals and consumer groups concerned about the effect on competition.
Verizon Wireless is a venture of Verizon Communications and Vodafone Group Plc.
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