New Coalition Opposes Verizon and Cable Spectrum Deals
A proposed sale of mobile spectrum from a group of cable providers to Verizon Wireless, along with accompanying marketing and research agreements, will lead to higher prices for broadband and mobile customers, a coalition of groups opposing the deal said Monday.
Some members of the newly formed Alliance for Broadband Competition called on the U.S. Federal Communications Commission and the U.S. Department of Justice to reject the two proposed deals for Verizon to buy Advanced Wireless Services (AWS) spectrum from four cable providers for US$3.9 billion. Other alliance members said they could live with the deals if the two agencies include several conditions focused on spectrum divestitures, roaming agreements and backhaul pricing.
The proposed deals would put an "excessive concentration of spectrum" in the hands of the nation's largest mobile carrier, said Kathleen Ham, vice president of federal regulatory affairs at T-Mobile USA.
The mobile market is at a critical juncture as carriers move to provide 4G LTE and only spectrum bands AWS and 700MHz are currently available for that service, she said. "It's very important that there be spectrum available for everybody to move to LTE," Ham said.
The proposed spectrum deals, announced in December, would allow Verizon to buy AWS spectrum from SpectrumCo, a joint venture among Comcast, Time Warner Cable and Bright House Networks, and from Cox Communications, a former member of SpectrumCo. The deals would allow Verizon and the cable providers to market each others' services and would create joint research agreements focused on integrating mobile and wireline services.
Members of the new alliance include T-Mobile USA, Sprint Nextel, Public Knowledge, and the Rural Telecommunications Group and RCA, two trade groups representing rural and regional mobile carriers. The members of the alliance had previously expressed concerns and organizers said the alliance will help them work together to continue to voice those.
Comcast suggested that the groups have long been working together through Washington, D.C., public relations firm the Glen Echo Group.
"Same PR firm, different day," Sena Fitzmaurice, Comcast's vice president for government communications, said in an email. "These groups organized by this PR firm have been sending out similar press releases, doing press conferences and doing filings at the FCC together for months. There's nothing new here."
Fitzmaurice also repeated Comcast's assertion that T-Mobile, which tried to merge with competitor AT&T last year, has been "inconsistent" in talking about the competitive landscape in the mobile market. Last year, T-Mobile executives said their merger should be approved because there was "extensive competition" in the mobile market, but recently, the company has said the Verizon deal with the cable firms would do "serious harm" to mobile competition, Comcast said in an April 26 filing at the FCC.
T-Mobile also questioned when Sprint fought against the AT&T and T-Mobile deal, saying "the fact that a major wireless competitor is making these arguments should give regulators pause," Comcast noted.
But members of the alliance said the Verizon and cable deals would create a cozy relationship among former competitors. The "side" research and marketing agreements would hurt consumers, said Harold Feld, legal director at Public Knowledge. The research agreement will create a patent portfolio that allows the companies to freeze out other competitors seeking to integrate wired broadband, mobile broadband and video services, he said.
"We could not see how you honored those agreements and avoided being a cartel," Feld said. "Not only does [the agreement] create the back room where these guys can meet every month in perfect security and talk about all the areas where they're supposed to be competing, but they can continue to collude through these technologies and standards."
Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is firstname.lastname@example.org.