Verizon's Deal With Cable Companies Finds Supporters, Detractors

A public affairs group is getting out the word that not all businesses are against Verizon buying spectrum from SpectrumCo and Cox. The marketing arrangements are another matter.

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Verizon Wireless, upon entering a deal with cable companies Cox Wireless and SpectrumCo€”a conglomerate of Time Warner, Comcast and Bright House Networks€”has found itself in shoes very much like those that AT&T wore for nine months or so last year, as it worked to persuade the Federal Communications Commission to let it buy smaller rival T-Mobile.

Verizon, like AT&T, finds itself beating back detractors who worry that the deal will hurt competition in the wireless industry, and so ultimately consumers. The partnership also worried about marketing details tucked in alongside the spectrum sale.

Trading documents with the FCC€”which has also received a good deal of mail, of late, from T-Mobile, Sprint and other businesses and public-interest groups questioning the deal and its motives€”Verizon has taken a two-pronged approach, arguing that the deal will benefit Americans and that it's not really anything the FCC should worry about, or possibly even has jurisdiction over.

However, not everyone is against the Verizon deal.

Eleven organizations have offered testimony in favor of, specifically, the spectrum sale, according to a document circulated by the DCI Group, a Washington, D.C.-based group that, according to its Website, helps clients "craft the right messages around their issues" and "ensure the desired policy-makers hear them."

In the DCI document, the Competitive Enterprise Institute is quoted as saying a denial of the Verizon, Cox and SpectrumCo applications "would be detrimental to the public interest."

"Making more bandwidth available now is not only critical for consumers but also to provide the lubricant for the 'app' market on which so many small and emerging businesses now depend," added the Latinos in Information Sciences and Technology Association.

The U.S. Chamber of Commerce, while declining to weigh in on the specific transaction, said that mobile broadband will be a "key component in the creation of jobs and innovation" and the recovery of the U.S. economy.

Only the Lane Metro Partnership (LMP), in its statement, seems to touch on arguably the most disputed aspect of the deal€”a for-now opaque arrangement in which Verizon and the cable companies will bundle and market each others' offerings.

"[A]greements such as this can actually expand competitive horizons and reduce costs by allowing bundled services to be marketed at a discount and by reducing duplicated costs through such mechanisms as integrated billing," said LMP.

On March 8, Politico ran an interview with Comcast Executive Vice President David Cohen, who said the spectrum sale and marketing agreements were inseparable.

"There was never any discussion about selling the spectrum without having the commercial agreements," Cohen said, according to Politico.

The article prompted Sprint, T-Mobile, the Rural Telecommunications Group, Media Access Project, Free Press, Public Knowledge and DirecTV to jointly write the FCC that same day, asking it to review all details of the deal and pleading for greater transparency.

"The Commission must ensure that the record includes complete and unredacted versions of the commercial agreements, and that interested parties are given sufficient opportunity to review and comment upon them," said the joint letter.

Verizon and its cable partners had earlier submitted a 299-page report to the FCC, describing the deal and offering testimony about its expected benefits. However, large sections of the document, available online for the public to review, were thought too private to include and were redacted.

In a March 8 letter, the FCC told Verizon and its partners that it requires "additional information and clarification of certain matters discussed in the applications and other information provided to the Commission."

It asked that all parties respond no later than March 22.