Franken: Small companies fear retribution if they oppose Verizon-cable deal

By Brendan Sasso - 03/30/12 04:37 PM ET

Sen. Al Franken (D-Minn.) said Thursday that small companies have told him they fear that if they publicly oppose Verizon's proposed deal with a coalition of cables, they will suffer retribution.

"You know, during the NBC/Comcast debate, I heard from smaller companies that opposed the merger but were afraid to do so publicly because they worried about the retribution they might face from Comcast. I heard the same thing during AT&T/T-Mobile, and I’m hearing it again now from companies concerned about Verizon’s deals with the big cable companies," Franken said in a speech to the American Bar Association about antitrust law.

"What better proof could there be that too much consolidation in the market is going unchecked?" Franken asked.

Verizon agreed to buy wireless airwave frequencies, known as spectrum, from cable companies including Comcast, Time Warner and Bright House Networks. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other’s services.

The side marketing deal would 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.

The Justice Department and Federal Communications Commission (FCC) are reviewing the deals. Consumer groups argue that the deals represent an agreement not to compete and will lead to higher prices for consumers.

They also worry that the spectrum sale will allow Verizon, the largest wireless carrier, to consolidate its control over the airwaves.

Verizon says the additional spectrum will help it meet the demands of data-hungry smartphone and tablet computers, and argues the cross-marketing agreements will not harm competition.

“It is important to note that the proposed spectrum purchase Senator Franken refers to is not a merger, involves neither the acquisition of customers nor a combination of operations or assets and involves the purchase of unused spectrum that would be put use by consumers," a Verizon spokesman said, distinguishing the deal from the NBC/Comcast and AT&T/T-Mobile mergers.

"There have been a number of opportunities for companies large and small, their trade associations and consumers to express their views on the matter and the FCC record reflects that they have done so,” the spokesman said.