Critics of Verizon Wireless’ Cable Deals Launch Coalition

Group hopes to put more pressure on regulators

Many of the same companies and groups that opposed and helped to shut down the AT&T purchase of T-Mobile are joining forces to take on Verizon Wireless' spectrum and marketing deals with its former cable rivals. By forming the Alliance for Broadband Competition, the group hopes to either convince regulators to block the transactions or impose restrictions on the deal to preserve wireless competition.

"We hope the Federal Communications Commission and the Department of Justice drill down in their review of this deal and identify the competitive harms," Steve Barry, the president and CEO of RCA-The Competitive Carriers Association, said during a press call Monday to launch the coalition. Other members of the coalition include Sprint, T-Mobile, the Rural Telecommunications Group, and Public Knowledge.

Verizon Wireless' $3.6 billion deal with SpectrumCo owners Comcast, Time Warner Cable and Bright House Networks, and $315 million with Cox Cable set off alarm bells in December, both for the purchase of spectrum from the former cable rivals and for the cross-marketing agreements to resell each other's services.

"Verizon and the cable companies are truly creating an axis of broadband power that threatens competition and consumer choice to their very core," said Carri Bennett, the general counsel of the Rural Telecommunications Group, in a statement. "Very quietly this axis has entered into complex transactions that will forever change how consumers access voice, Internet and video service, which companies these consumers will purchase those services from, and at the end of the day, what those services will cost."

"We are concerned how these agreements move from competition to collusion and from collusion to cartel," added Harold Feld, the legal director for Public Knowledge.

In a statement, Verizon wrote off the coalition as the same old arguments the groups have been making since the deal was announced. "This faux-coalition is 'old whine in a new bottle," said Rich Young, a Verizon spokesman. "The same companies and political groups, making the same claim, that have already been filed at the FCC."

It's hard to tell just how much impact critics of the deal have had on regulators and if forming a coalition can move the needle. In March, the FCC  asked for more information about the transactions and more recently extended its review by a couple of weeks. The Senate Judiciary Antitrust Subcommittee held a hearing, but Chairman Herb Kohl (D-Wisc.) has held out judgment. House Democrats are raising questions and pressing GOP leadership to do the same, but so far no hearing has been set.

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