Public Interest Groups Ask FCC To Block Verizon Deals With Cable Companies

February 22, 2012 , , ,

The Federal Communications Commission (FCC)
should not allow Verizon to enter into a complex series of transactions with
the country’s largest cable companies, nine public-interest groups, led by
Public Knowledge, said Tuesday.

In the filing, the groups said that
Verizon’s arrangements to buy spectrum from Comcast, Time Warner Cable and
Bright House, with a separate deal for Cox, would “would fundamentally
alter the nature of the telecommunications world in a manner utterly contrary
to that intended by the 1996 Telecommunications Act.”

The groups on the filing are: Public
Knowledge, Media Access Project, the New America Foundation Open Technology
Initiative, Benton Foundation,1 Access
Humboldt, Center for Rural Strategies, Future of Music Coalition, National
Consumer Law Center, on behalf of its low-income clients, and Writers Guild of
America, West

A copy of the filing is here.

Under the deals, Verizon, the largest
wireless company, would gain even more spectrum, “aggravating existing anticompetitive problems with
spectrum aggregation,” the filing said.  In addition, under related agreements, Verizon agreed to
sell the video services of the cable companies.  Those side agreements “give rise to serious concern
that not only will these providers decline to compete further with one another,
they will actively collude with one another,” the groups said. 

Verizon and the cable companies also agreed to set up a
“Joint Operating Entity” to develop new technologies to link voice,
video and wireless traffic.  The
technology that could result would be a new industry standard controlled by
companies that control approximately 40% of the wireless market, 40% of the
residential broadband markets, and 40% of the residential video market  and have sizable program holdings
through Comcast’s ownership of NBCU.

“To ‘supersize’ Verizon Wireless with additional
spectrum from Comcast, Time Warner Cable, Bright House, and Cox so that the
largest wireless operator can better promote the services of the largest
incumbent cable operators directly undermines the pro-competitive policies of
the 1996 Act and is thus contrary to the public interest,” the groups

An additional factor is the secrecy under which the deals
have been presented to the FCC, the groups said, arguing, “And where, as here, the Applicants have
refused to make complete copies of pertinent
documents available in the record—even under the strictest confidentiality—alarm bells
should ring with deafening insistence.”

side operating agreements can’t be fixed and should be denied by the
Commission, the groups said, arguing that the public does  “not even have access to the full
text of the contracts between the parties, and because, in any event, the
gravest threat could come down the road, as the companies modify the scope of
their cooperation.”

spectrum sale should similarly be turned down, but if the FCC decides to grant
it, there should be requirements that Verizon allow data roaming on its network
and that the FCC impose requirements that Verizon build out its spectrum or
make the spectrum available on secondary markets.