Verizon, Comcast Grilled Over Competition, Bundling

A Senate subcommittee questioned Verizon and Comcast executives about the details of their agreement, while the FCC made an announcement that could open up spectrum to smaller carriers.

Verizon Wireless and Comcast executives were questioned March 21 by the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights, regarding whether an agreement that Verizon and several cable companies have made is a threat to competition and consumers.

The deal includes the sale of wireless spectrum to Verizon, which like its competitors is desperate for more spectrum to increase its ability to roll out its 4G network, as well as a marketing arrangement. The latter includes plans for Verizon and the cable companies€”not just Comcast but also Time Warner, Bright House Networks and Cox Communications, which collectively cover more than 70 percent of the nation's cable market€”to sell each others' products in bundled offerings. However, specific details aren't known. Concerned about those specifics, consumer rights' groups and other carriers have appealed to the Federal Communications Commission to press the partners for clarity.

Leading the hearing, Sen. Herb Kohl (D-Wisc.) said in a statement that the deal will give Verizon what is "likely the last swatch of crucial spectrum available for years to come," keeping it out of the hands of competitors. He noted:

"The basic premise of the landmark Telecommunications Act of 1996 was that cable companies and phone companies would enter each other's markets and compete. And this vision was well on the way to being realized ... In addition, recent years have seen a tremendous expansion of cell phone service and wireless devices as a way both to make phone calls and access the Internet. Many now wonder if these agreements that we are examining today will roll back these advances in competition and even amount to a truce between one of the two largest phone companies and over 70% of the cable TV industry."

Sen. Al Franken (D-Minn.) wondered the same, asking Comcast Executive Vice President David Cohen, "This deal seems to completely abandon the goals of the Telecom Act and seems to signify the promises that Comcast made in 1996 will no longer come to fruition. Do you disagree with me on that?"