Verizon's Conditions For Spectrum Sale Draw Opposition

Verizon Wireless this week said it would sell portions of the spectrum it acquired in 2008, but only if the Federal Communications Commission and Justice Department approve a separate deal between Verizon and cable companies.

The news was met with concern by public interest groups, who say that Verizon's proposed alliance with cable companies will result in less competition.

“At the end of the day, Verizon and the cable companies will still have created a cartel in which Verizon will rule the air for wireless broadband and cable will offer the only widespread true high-speed landline Internet services," Public Knowledge legal director Harold Feld said in a statement. “Recent history of such spectrum sell-offs shows that when Verizon and AT&T sell off spectrum, it’s Verizon who buys AT&T’s, and vice versa. Having AT&T buy Verizon spectrum in this instance would do nothing to change to help consumers."

S. Derek Turner, researcher director at Free Press, added that the announcement shows that Verizon has "warehoused spectrum," adding that it "will likely profit handsomely from this spectrum speculation strategy."

Verizon last December said it had forged a deal to pay $3.6 billion to license spectrum from Comcast, Time Warner and BrightHouse Networks. The agreement, which is awaiting regulatory approval, also provides for Verizon and the cable companies to market each other's services.

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

But Public Knowledge and other groups have asked the FCC to block the deal. They say the alliance will undermine competition, especially because Verizon is no longer expanding its high-speed FiOS network.

"To 'supersize' Verizon Wireless with additional spectrum from Comcast, Time Warner Cable, BrightHouse, and Cox so that the largest wireless operator can better promote the services of the largest incumbent cable operators directly undermines the pro-competitive policies of the 1996 Act and is thus contrary to the public interest," they argued in a petition filed with the FCC earlier this year.

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