Verizon T-Mobile Deal Appeasing FCC To Allow SpectrumCo Swap

According to the rumor mill Verizon’s proposed AWS spectrum swap with T-Mobile and their 700 MHz divestitures are appeasing the FCC into accepting the SpectrumCo swap but the DOJ is still worried about the JOE with the cable companies. Whether the FCC is intent on approving it its reported they won’t do so without DOJ support as well. This is good news for consumers and competition especially if reports are accurate that the DOJ might oppose these sweetheart deals.

Opposition to Verizon’s cable deals continue from public interest groups and consumers wanting to ensure sufficient broadband and mobile broadband competition continue despite the agency resale and joint operating entity agreements
between these companies. Since a Comcast executive has admitted this is an integrated transaction both the DOJ and FCC should be examining both aspects in combination. The fact is as bad as both the license transfer and JOE are individually they are far worse together for consumers. The Consumers Federation of America has even spoken out that the JOE ends the 1996 Telecommunications Act’s competitive promise for consumers by turning competitors into partners so they can divy up the spoils of the Internet market by dividing the Internet amongst themselves. These deals must not be allowed to proceed at least not with the JOE. The license transfer must either be conditionally approved and the JOE denied or both rightly denied.

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Stop Verizon & Big Cable’s Shenanigans

As if the “inevitable” AT&T T-Mobile merger rightly killed by federal regulators wasn’t bad enough now Verizon Wireless and a handful of big cable companies want to enter into anti-competitive marketing agreements to divide up the Internet amongst themselves. The agency resale and joint operating entity agreements are part of an anti competitive spectrum licensing transfer filed by SpectrumCo (a consortium of cable companies including Comcast NBC, Time Warner Cable and Bright House Networks) and Cox Communications. If this  sweetheart deal between Verizon Wireless and Big Cable  is approved what little broadband competition still exists in the fixed wire-line market would disappear with Verizon Communications expected to discontinue expansion of their  land-line FIOS Phone, Internet and TV services into new markets if it does not abandon FIOS service altogether. There’s no way to sugarcoat it these deals would be a disaster for consumers, competition and violate the intent of Congress when they passed the Telecommunications Act of 1996.

The good news is public interest groups have convinced the FCC in examining whether to approve the license transfer or not to request the companies involved provide them more information on their marketing agreements. As such the FCC must review the commercial agreements and the spectrum transfer in combination even if its review of the marketing agreements are part of a separate proceeding.

After all Comcast’s Executive Vice President David Cohen has admitted that the deals are part of an integrated transaction. There was never any discussion about having the spectrum sale without the commercial agreements. Both the Justice Department and the FCC are examining the deals in combination which public interest groups say should be denied anyways because of the massive spectrum concentration that would occur should the deals be approved. After all both Verizon Wireless and AT&T Mobility have plenty of existing spectrum compared to smaller rivals  in both the national post-paid and pre-paid market(s) and the regional post-paid/pre-paid market(s) like Sprint Nextel, T-Mobile USA, MetroPCS, Leap Wireless (Cricket) and C-Spire Wireless.

If you haven’t had the opportunity to comment yet on the proposed transaction(s) please e-mail the U.S. Justice Department’s Antitrust Division at antitrust.complaints@usdoj.gov or file comments with the FCC at their website using docket 12-4. Also contact your member of Congress including your Representative and your U.S. Senators urging their opposition to the transactions. The U.S. Senate recently held an antitrust subcommittee hearing on the proposed deals where Verizon Wireless and Big Cable faced strong criticism. Let’s keep up the pressure and stop Verizon & Big Cable from carving up the Internet amongst themselves.