Verizon Wireless plans to tell U.S. lawmakers vetting its proposed $3.6 billion purchase of airwaves from cable companies led by Comcast Corp. that the deal addresses a critical need without harming competition.
“No customer will see fewer choices or increased prices as a result,” Randal Milch, general counsel of Verizon parent Verizon Communications Inc., said in testimony submitted to a Senate antitrust panel for a hearing Wednesday.
Verizon Wireless agreed to share marketing with largest cable provider Comcast and other sellers of unused airwaves, a group that includes second-biggest operator Time Warner Cable Inc. and closely held Bright House Networks LLC.
Opponents said today the accord announced Dec. 2 would result in less competition and higher prices. The Justice Department and Federal Communications Commission are examining the deal and a similar $315 million agreement between Verizon Wireless and Cox Communications Inc.
Tomorrow’s session before a Senate antitrust subcommittee chaired by Senator Herb Kohl, a Wisconsin Democrat, carries the title, “The Verizon/Cable Deals: Harmless Collaboration or a Threat to Competition and Consumers?”
Kohl urged regulators last year to prevent second-largest U.S. wireless provider AT&T Inc. from buying fourth-biggest T- Mobile USA Inc., and AT&T abandoned the deal after the Justice Department sued to block it.
Verizon Wireless said the spectrum purchase will bring it airwaves needed to meet demand that’s soaring as consumers buy more smartphones and data-hungry tablet computers such as Apple Inc.’s iPad. Basking Ridge, New Jersey-based Verizon Wireless is 55 percent-owned by Verizon and 45 percent-owned by Vodafone Group PLC, based in Newbury, U.K.
The marketing agreements let Verizon Wireless and cable companies act as sales agents for the other’s services. Verizon Communications will have “every incentive” to compete against cable companies with its FiOS high-speed wired service, Milch said in his testimony. More than 85 percent of households served by the cable companies aren’t in areas reached by FiOS, he said.
The deal would create an “unchecked monopoly by the nation’s largest cable and wireless companies,” the Communications Workers of America and the International Brotherhood of Electrical Workers said today in a statement. The unions said they obtained 75,000 signatures on an online petition opposing the deal.
“This lucrative deal will kill Verizon’s incentive to compete with cable and end FiOS development to new areas,” the unions said. Cities bypassed by Verizon FiOS such as Boston and Baltimore, as well as Buffalo, Albany and Syracuse in New York State, and any rural areas will never get the network, the groups said.
The deals would let Verizon and the cable companies “divide the market for at-home wireline broadband,” or high- speed Internet service, policy group Free Press said in written testimony.
“Allowing for further consolidation in this marketplace will only drive prices higher, reduce consumer choice, and have drastic consequences on the rate of innovation as the companies involved are freed from competition,” said the testimony by Joel Kelsey, Free Press policy adviser.
Philadelphia-based Comcast plans to tell lawmakers the deal benefits consumers, Executive Vice President David Cohen said in a blog posting today.
“This deal provides a quick and efficient path for Comcast to offer wireless services like those that are offered in bundles by AT&T, DirecTV and others of our competitors,” Cohen said in the blog post. “Verizon Wireless will be able to offer customers new options for subscribing to wired video, voice, and high-speed Internet services.”