By Brendan Sasso - 08/16/12 09:56 PM EDT
"Without meaningful competition for broadband, the cable companies will be able to charge whatever they want — and drive consumers to purchase expensive bundles of services they don’t want or need in order to get Internet service. The Department of Justice has addressed some of the worst parts of this transaction, but I don’t think it has gone far enough," he said.
Verizon agreed in December to buy licenses for cellular frequencies from Comcast, Time Warner, Cox and Bright House. The spectrum will allow Verizon to expand the capacity of its wireless network to meet the growing data demands of smartphones and tablet computers.
Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell each other's services.
The arrangement will allow customers to buy the cable companies' services from Verizon Wireless stores and allow the cable companies to sell Verizon contracts as part of their packages.
The Justice Department's settlement forbids Verizon from selling the cable companies' products in areas where it offers its own Internet and cable service, FiOS. The settlement also amends the deal to allow the cable companies to sell the wireless services of Verizon's competitors in five years.
The Justice Department's approval is conditional on the completion of a separate deal that Verizon announced with T-Mobile in June. When it became clear that regulators were taking a close look at its spectrum deal with the cable companies, Verizon agreed to sell off some of its spectrum to T-Mobile, the smallest of the four national wireless carriers.
Federal Communications Commission (FCC) Chairman Julius Genachowski said Thursday he will circulate an order with the other commissioners to approve the deal.
Franken urged the FCC to "stand up for consumers and address the lack of competition for high-speed broadband before it votes to approve this deal.”
Rep. Jerrold Nadler (D-N.Y.) also said that, even with the conditions, he is concerned that the deal will harm competition and cost jobs.
"DOJ, the FCC and Congress must remain vigilant to ensure that our worst fears about this deal do not come to pass," he said.
But other lawmakers were more supportive of the outcome.
Sen. Herb Kohl (D-Wis.), chairman of the subcommittee on Antitrust, Competition Policy and Consumer Rights, said he is pleased with the changes the Justice Department required of the deal. He added that his subcommittee will "closely monitor" the implementation of the arrangements.
The subcommittee's top Republican, Sen. Mike Lee (Utah), who had already expressed support for the original deal, said he is pleased the companies will be allowed to move forward.
He said the deal will benefit consumers by "putting previously fallow spectrum to efficient use, expanding consumer choice through the introduction of a new bundled offering, and spurring innovation in the development of new technologies and products."
Rep. Edward Markey (D-Mass.) applauded the Justice Department for blocking provisions that he said would have limited competition. He said the sale of spectrum from Verizon to T-Mobile will help ensure that consumers have quality alternatives to the largest carriers.
“As with any significant change to the communications landscape, vigorous oversight of implementation is essential to ensure that consumers benefit, competition is promoted and innovation is ignited to the benefit of our economy and job creation," Markey said.
— Jennifer Martinez contributed.