Home » BH (See Charter) »Comcast/Xfinity »Competition »Cox »Public Policy & Gov't »TWC (see Charter) »Verizon »Wireless Broadband » Currently Reading:

FCC on Verizon-Big Cable Spectrum Deal: Sure, Why Not?; But Justice Dept. Thinking Twice

Despite concerns from consumer groups that a deal to exchange wireless spectrum in return for collaborative marketing between two competitors will lead to higher prices for consumers, the Federal Communications Commission seems prepared to approve it, according to a report from the Reuters news agency.

Two sources familiar with the matter told Reuters the FCC has taken the lead on the “spectrum transfer” issue, which involves turning over prime wireless spectrum currently owned by large cable operators Comcast, Time Warner Cable, Cox, and Bright House Networks to Verizon Wireless. The combined licenses the cable industry holds are in the majority of major American cities, which critics charge Verizon will acquire to eliminate any potential competitive threat from a new nationwide wireless carrier.

Verizon’s recent moves to sell off its own “excess” spectrum to its current competitors has garnered favor inside the FCC, according to sources. Verizon Wireless recently agreed to transfer some of that spectrum to T-Mobile USA, which coincidentally was a fierce opponent of the deal between Verizon and cable operators. T-Mobile’s opposition has since muted.

Licenses owned by the cable industry would have been expansive enough to launch a new national wireless competitor. (Image: Phonescoop)

The deal between Verizon and the nation’s top cable companies is worth about $3.9 billion, but the Justice Department continues to signal concerns it would ultimately cost consumers more than that. According to Reuters, Verizon remains in “tougher talks” with lawyers inside the Justice Department who are concerned cooperative marketing between the phone and cable companies would result in decreased competition and higher prices.

One source told Reuters regulators were hoping Verizon’s now-stalled fiber to the home network FiOS would bring major competition to the cable industry, which until then had only faced moderate competition from satellite dish providers. In return, Comcast and other cable operators were expected to invade the wireless phone marketplace, adding needed competition.

Instead, both sides have retreated to their respective positions — Verizon focusing on its wireless service and Comcast and other cable companies abandoning interest in wireless phones and sticking to cable-based products.

The idea that both would begin to cross-market each other’s products is “a problem” according to the Justice source not authorized to speak publicly.

Additionally, concerns are being raised over a proposed “joint operating entity” between Verizon and cable operators that would focus on developing new technologies that could lock out those not in the consortium.

No decision is expected from the Justice Department until August, but Justice officials have signaled they have several options they can pursue:

  1. Sue to stop the spectrum transfer;
  2. Force the companies to modify their proposal to reduce potential collusion;
  3. Approve the deal but monitor how cross-marketing agreements impact on consumer markets for wireless and cable products.

Search This Site:

Contributions:

Recent Comments:

  • Conan: Live long and invest, Tom Galisano....
  • John B.: What "competitor"? In my area AT&T is currently the only other ISP and they can only provide a blazing top speed 5Mbps down at my address. And if...
  • joe: Its about time ROCHESTER gets gigabit speeds! Buffalo, Auburn and Syracuse had Verizon Fios for a long time (in certain areas of the cities) but Roche...
  • Eric: I believe that I'm one of the people that fall into the 75K+ that will be receiving HughesNet as the solution to not having access to broadband. Gran...
  • FredH: ....and you know what? The worst part is they could give two sh*ts. "Don't like it? Go to our competitor. Oh yeah, there isn't one. Hahahahahaha"...
  • Joe: managers folks - forget this company. worst company of my 30 year career in the industry...
  • Joe: I worked for Frontier over 10 years. They have a Rochester clique that goes back to Rochester Telephone Company - Rochester Telephone Corporation was...
  • Phillip Dampier: I realize lots of people hate Spectrum (or Comcast, or whatever cable company services a particular area.) Historically however, most people will not ...
  • Phillip Dampier: It is very unlikely Greenlight would attach infrastructure to utility poles without a permit because it is an involved and integral part of network co...
  • Rob: I live in Webster. I have been on Greenlight’s sign up list, after paying my $10, for nearly 3 years now. Our neighborhood is at 94% of sign ups need...
  • Ar Be: Not surprised. Frontier Fios has totally ruined the view experience for those of us in Texas. Particularly those in the Dallas / Fort Worth area. Ho...
  • Steve: The article states that Greenlight May find competition tough since Spectrum will soon be offering faster internet offerings. The article ignores one ...

Your Account: