Consumer groups urge FCC to block Verizon-cable deal

A coalition of consumer groups, including Public Knowledge, the Media Access Project and the New America Foundation, urged the Federal Communications Commission (FCC) on Wednesday to block a $3.6 billion deal between Verizon and a group of cable companies.

In December, Verizon agreed to buy wireless airwave licenses, known as spectrum, from cable companies including Comcast and Time Warner. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other's services.

The side deal will allow consumers to buy the cable companies' services in Verizon Wireless stores and allow the cable companies to sell Verizon contracts as part of their packages. 

In their filing, the consumer groups urged the FCC to block both deals.

The groups warned that allowing Verizon, the largest wireless carrier, to gain more control over the airwaves would aggravate "existing anticompetitive problems with spectrum aggregation."

Supporters of the deal note that the cable companies had no immediate plans to use their stockpile of spectrum, and Verizon will be able to use the spectrum to power its next-generation wireless network.

"We believe the spectrum purchase is clearly in the public interest," a Verizon spokesman said. "It is in line with goals in the FCC’s National Broadband Plan to reallocate or repurpose unused and underutilized spectrum to higher-valued uses, and the FCC has also noted that secondary market transactions such as this one are important to ensure that existing spectrum can get into the hands of providers who can use it efficiently to serve customers."

The consumer groups said that if regulators decide to approve the spectrum sale, they should impose requirements on Verizon to expand its service and to allow other companies to roam on its network.

They took a more uncompromising position on the joint-marketing agreements, warning the deals would "provide a mechanism for future collusion on pricing, building out, coverage and other market control methods."

They said the deal would discourage the cable companies from ever providing wireless service and would discourage Verizon from investing in its own cable service, FiOS.

They also slammed Verizon and the cable companies for not releasing more details about the marketing agreements.

"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," the groups wrote.

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