Verizon's Proposed Starry Deal Unlikely to Raise Competition Concerns: New Street
Regulators are unlikely to view Verizon’s acquisition of Starry as “meaningfully reducing competition,” though there are unanswered questions about how the deal will be evaluated, New Street analyst Blair Levin told investors Thursday. “The government has not opined on the extent to which a fixed wireless service, such as Starry, competes in the same product market as 5G wireless and/or wireline broadband services,” he said in a report. Verizon announced the deal last week (see 2510080035).
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If the government views Starry as competing with 5G, “then the transaction would be seen as a 6 to 5 merger (Starry plus 3 wireless plus 2 wired) which the government would not view as likely to substantially lessen competition,” Levin wrote. But if regulators view Starry as competing with wired services, it could be viewed “as a 3 to 2 transaction,” he said. “However, Starry is such a small competitor, we are dubious that the government, even just looking at fixed competitors, would conclude the deal is likely to lessen competition.”
Starry had the potential to serve 40 million homes that are covered by its millimeter-wave spectrum at “bandwidths ranging from 200 MHz to 600 MHz,” Levin added. “It never had the capital to address even a fraction of these homes.” Verizon, "on the other hand, has a nationwide footprint of lightly-used mmWave licenses, with bandwidths averaging over 1,700 MHz.”