Verizon and Comcast executives are among some of the witnesses to testify before a Senate subcommittee about the deal between the mobile carrier and the residential broadband giants.
Verizon Wireless' deal with
cable companies Comcast, Time Warner, Bright House Networks and Cox Communications
will come under federal scrutiny March 21, as a Senate Judiciary Committee
Subcommittee on Antitrust, Competition Policy and Consumer Rights convenes to
question witnesses about whether the cable companies' deal with the nation's
largest carrier is "A Harmless Collaboration or a Threat to Competition
and Consumers?" as the hearing's title asks.
Witnesses for the hearing
include Randal Milch, Verizon's executive vice president and general counsel;
David Cohen, Comcast executive vice president; and Joel Kelsey, a policy
advisor with the consumer advocacy group the Free Press.
Cohen, in a March 20 blog post on the Comcast site,
said he's looking forward to presenting the "public interest
benefits" of the deal, which "provides a quick and efficient path for
Comcast to offer wireless services like those that are offered in bundles by
AT&T, DirecTV" and other Comcast competitors.
Cohen also plans to share
information about a new research and development joint venture that will allow
the companies to "develop new technologies that compete with similar
solutions offered not just by AT&T but also by Dish Network, Google, Apple,
Microsoft and others."
DirecTV is among a number of
organizationsincluding Sprint and T-Mobilethat have come out against the
Verizon deal at this point, telling the Federal Communications Commission that
the details of the deal are too opaque for interested parties to appropriately
respond to.
The deal includes Verizon
purchasing spectrum, an aggressively pursued asset in the wireless market, as
increasing amounts of it are required to support the increasing numbers of
smartphones, tablets and data cards coming online. While AT&T's failed 2011
bid for T-Mobile highlighted the industry's concern over any one carrier
accumulating a spectrum pile considerably larger than the others, more
contested are marketing-related details pertaining to Verizon and the cable
companies bundling and selling product for each other.
Sen. Al Franken (D-Minn.), requesting
the FCC look into the matter, noted that such a deal would turn "rival
companies into partners, rather than competitors," which he feared
"will ultimately mean less competition, less choice and higher prices for
consumers."
Earlier this month, the FCC asked
Verizon and its partners to submit some of the information they had redacteddeeming
it too private for inclusionfrom documents submitted to the commission.
In written
testimony presented for the hearing, Free Press' Kelsey describes a mobile
wireless market that's become "top heavy," with two carriers
controlling a great portion of profits and market share and most consumers
having one, or at most two, options for residential wired broadband service.
"Prices have remained
high through artificially constructed bundles that force consumers into buying
larger packages of services than they want or need," Kelsey stated. He added:
This lessening of
competition and the discipline it provided for the market has left consumers
with fewer choices, higher prices and unfair terms and conditions. This is no
accident. It is the result of public policy decisions over the last 12 years to
deregulate the broadband marketplace while it still faced monopoly conditions,
and to place a disproportionate amount of the nations most valuable spectrum
into the hands of just two wireless carriers.
Kelsey goes on to describe
similar services in other countries, where they're faster and cheaper. In South
Korea, for example, connections are three times faster and one-third less
expensive, resulting in adoption rates close to 94 percent.
"This is not a result
of the free hand of the market," says Kelsey. "This is the result of
a failure on the part of our nation's policymakers over the past 15 years to
protect and promote competition."
Verizon's Milch, in his
written testimony, insisted, "No customer will see fewer choices or
increased prices as a result [of the deal]."
At the hearing, which will
take place in the Senate building at 2 p.m., analysts will be taking note of
the rigorousness of the questions asked, and whether any more details about the
marketing arrangement are revealed.
Michelle Maisto has been covering the enterprise mobility space for a decade, beginning with Knowledge Management, Field Force Automation and eCRM, and most recently as the editor-in-chief of Mobile Enterprise magazine. She earned an MFA in nonfiction writing from Columbia University, and in her spare time obsesses about food. Her first book, The Gastronomy of Marriage, if forthcoming from Random House in September 2009.
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