Antitrust chairman raises new questions about Verizon spectrum deal

{mosads}Verizon wants to enter into a $3.6 billion deal with Comcast, Time Warner and Bright House Networks to buy blocks of spectrum. The deal would also allow Verizon and the cable companies to cross-sell each other’s services. 

Kohl’s subcommittee held a hearing to examine the spectrum deal on March 21. 

Milch testified at the hearing on behalf of Verizon and told lawmakers the deal would result in more choices for consumers because they would be able to buy wireless services in a bundle with cable.

Milch also assured lawmakers that no one would be “constrained to buy [service] in these bundles.” 

“There’s nothing to get from this bundle other than a convenience or a discount of some sort that the consumer can choose or not choose,” Milch said.

In the letter, Kohl noted that Verizon didn’t announce the discontinuance of standalone DSL until after the hearing and said the move contradicts Milch’s testimony. 

“It appears inconsistent for Verizon to argue, on one hand, that the joint marketing agreements and bundling … increases consumer choice, while on the other hand the company is tying voice and DSL services, compelling consumers to purchase bundled offerings,” he said. 

“[I]t is entirely unclear what benefits accrue to competition and to consumers when consumers are forced into purchasing these bundled offerings,” he said. 

Kohl closed the letter with a series of questions, asking when Verizon decided to discontinue stand-alone DSL, whether it had anything to do with the spectrum deal, what Verizon’s savings will be from discontinuing stand-alone DSL and the reason for the “price differential” between bundled and stand-alone DSL. 

Kohl said he expects a response from Milch within three weeks. 

Verizon spokesman Ed McFadden said that by discontinuing stand-alone DSL, Verizon is “meeting the needs of our customers and can control our cost structure more effectively, enabling us to continue providing competitively priced services to existing and new customers.” Regarding Kohl’s letter, McFadden said: “We are reviewing the letter and will respond appropriately to the Senator’s questions.”

— Updated at 4:18pm with quote from Verizon spokesman Ed McFadden on Kohl’s letter


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