Home » Bright House »Comcast/Xfinity »Competition »Cox »Public Policy & Gov't »Time Warner Cable »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:

  • AustinTX: James, my suggestion would be to switch to TWC rental modems, and fry 2-3 of them over the course of several weeks by running 24v AC into the coax con...
  • Dragos: For 1Gbps in Romania we pay around 12 EUR (VAT included - 24%). http://www.rcs-rds.ro/internet-digi-net/fiberlink?t=internet-fix&pachet=digi_ne...
  • James R Curry: Hey, Phillip - While not related to Comcast directly -- I rent my modem from TWC, and while I'd rather buy one outright, there's one big factor ...
  • Sean: I believe that there are issues intermixing DOSCIS 2/3 modems on a node. It's been about 5 years since I've worked with a CMTS so I am by no means an...
  • AustinTX: Yep, this isn't about "your old modem isn't capable of the wonderful new speeds we're providing to your service tier", it's about "we know your custom...
  • MJ Lee: This is strange. I did get a letter from Time Warner saying my apartment was qualified for Time Warner Cable Maxx, but when I applied for it, I got an...
  • Tim: You know this is overstating the case ... unlimited data adsl2 plans are available from $60 in Australia. Average price is about $90...
  • Phillip Dampier: I think 10/Gbps is available in the USA as well, on an obscenely expensive metro Ethernet or commercial fiber link provisioned by a telecom company. ...
  • Phillip Dampier: Singapore is doing a much better job than Malaysia with fiber speeds and pricing, and competition is what is driving speeds up and prices down. If you...
  • Phillip Dampier: We've covered South African broadband here before. At least South Africa now has uncapped broadband, so count that as a victory. International capacit...
  • SumTinWong: So korea, how much bandwidth do you have to other countries. It's all nice and good if you got supergigabit but only get 1mbit to facebook/netflix. In...
  • Richard: In New Zealand using Vodafone Supernet (Coaxial Cable. Plan Speeds are 50mb/s / 2mb/s) Test just ran from Christchurch to other side of Australia, Pe...

Your Account: