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Tech / TECHNOLOGY

Public-Interest Groups Want FCC to Block Deal Between Verizon and Cable Companies

Some groups fear a deal would concentrate scarce spectrum in the hands of Verizon.(George Frey)

photo of Juliana Gruenwald
February 22, 2012

A coalition of public-interest groups and wireless provider T-Mobile USA are calling on the Federal Communications Commission to deny Verizon’s bid to buy spectrum and enter into marketing agreements with several cable companies.

Verizon announced in December that it would buy spectrum from a cable-firm joint venture made up of Comcast, Time Warner Cable, and Bright House Networks and also make a marketing agreement to cross-promote their services. Verizon also reached a separate, similar agreement with cable provider Cox Communications. 

Verizon argued that the spectrum sale was pivotal to helping the firm meet its customers’ demand for wireless capacity. “This sale of spectrum is an important step toward ensuring that the needs and desires of consumers for additional mobile services will not be thwarted by the current spectrum shortage,” the company said. 

 

The FCC is examining whether the spectrum sale is in the public interest, while the Justice Department is examining the deal’s antitrust implications. Groups opposing the deal had until Tuesday to file comments with the FCC. Meanwhile, the Senate Judiciary Antitrust Subcommittee said on Wednesday that it will hold a hearing on March 21 to examine the Verizon deals with cable companies.

Critics worry that the deals will further concentrate scarce spectrum in Verizon's hands and would hamper the limited competition that exists now in the residential market for wired television, voice, and Internet access. 

“The proposed transactions will lead to increased spectrum consolidation in the hands of the largest wireless-service provider in the United States, and will effectively ensure that provider and the largest cable companies in the country will never again attempt to compete against each other in their respective businesses,” the Benton Foundation, Media Access Project, New America Foundation, Public Knowledge and others wrote in their petition.

The public-interest groups are not alone in raising objections to the agreements. T-Mobile, which late last year failed to win regulatory approval for its acquisition by AT&T, told the FCC that the spectrum deal in particular would “foreclose the possibility that this spectrum could be acquired by smaller competitors – such as T-Mobile – who would use it more quickly, more intensively, and more efficiently than Verizon Wireless.”

Sprint, the nation’s third-biggest wireless provider, urged the commission to “carefully review” the deal. “Negotiated agreements among Verizon, Comcast, Time Warner Cable, Cox, and Bright House could determine the competitive future of the communications industry in large portions of the country,” Sprint said in a filing on Tuesday.

Some minority groups, including the National Organization of Black Elected Legislative Women and the Hispanic Technology and Telecommunications Partnership, support the deal because they say it will help increase the spread of wireless broadband technologies. Several minority groups made a similar argument in supporting the AT&T-T-Mobile merger. 

“In order for women, their families, and their communities to continue to reap the full range of benefits enabled by broadband, policymakers at every level of government must address the looming spectrum crisis by making additional spectrum resources available to wireless-service providers,” the National Organization of Black Elected Legislative Women said in comments it filed with the FCC.

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