Senate To Examine Verizon's Partnership With Cable Companies

Capitol-Hill-build-

The head of the Senate antitrust subcommittee said Tuesday that he intends to convene a hearing to examine a proposed alliance between Verizon and three cable companies.

"The subcommittee carefully examines questions about competition in the wireless and video markets, with the ultimate goal of protecting consumers and reducing their cable and cell phone bills, and these deals are no exception," Sen. Herb Kohl (D-Wisc.) stated. The hearing will be held after the February recess.

The deal, announced in December but still awaiting regulatory approval, calls for Verizon to pay $3.6 billion to license spectrum from Comcast, Time Warner and Bright House Networks. The agreement also provides for Verizon and the cable companies to market each other's services.

Verizon and Comcast are already co-marketing their services in Seattle, Portland and the San Francisco area. They are offering a quadruple-play deal that allows consumers that sign up for Comcast's Xfinity TV bundle and Verizon's mobile phone service to receive a $300 prepaid Visa debit card.

Critics argue that the arrangement will diminish competition, especially given that Verizon recently stopped expanding its high-speed FiOS network. Advocacy group Free Press said in a December letter to the Federal Communications Commission that the deal “would weaken the incentives for each of these companies to compete with one another in the provisioning of high-speed Internet, wireless, and MVPD services.”

Harold Feld, legal director at advocacy group Public Knowledge, cheered news that the Senate will examine the proposed deal. “Even without the agreements between Verizon, Comcast and the other cable operators to resell each other's services, this transaction would raise serious concerns about spectrum aggregation and the future wireless competition,” he stated. “But when, in addition, competitors become resellers of each others services, those charged with protecting consumers and promoting competition have a duty to take a very careful look.”

Next story loading loading..