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DOJ, FCC to Approve Verizon Cable Deal
Albeit With Location, Duration Conditions
by Karl Bode 12:27PM Thursday Aug 16 2012
As had been expected, both the Department of Justice and the FCC today stated they'd be approving Verizon's massive spectrum-sharing and co-marketing arrangement with the cable industry. Also as expected, conditions will be placed on the deal restricting the locations where cross-promotions can be offered and the duration of the arrangement. The spectrum sale can proceed, provided that Verizon adheres to promises to sell a significant chunk of spectrum to T-Mobile. Those promises were made by Verizon lawyers to get the deal approved, and it appears that they worked exactly as intended.

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While neither agency offered up a list of specific conditions yet, both did take time to release pages upon pages of statements collectively patting themselves on the back, claiming that the conditions they placed will protect consumers from anti-competitive action by the combined companies.

"By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers," Joseph Wayland, Acting Assistant Attorney General in charge of the department’s antitrust division, said in a statement.

"The Antitrust Division's enforcement action ensures that robust competition between Verizon and the cable companies continues now and in the future as technological change alters the telecommunications landscape," Wayland added.

That's highly unlikely, since Verizon was barely competing with cable operators at this point to begin with, and what competition that exists between the companies is in sharp decline. Verizon has already been moving away from caring a whit about landline services, and as we've been exploring has been intentionally driving DSL users to cable. Consumer advocates and competitors had been concerned that as the cable industry and Verizon grow even closer, there will be a reduction in the already borderline-feeble attempt to compete on the landline service front.

FCC boss Julius Genachowksi was equally gushing about his agency's approval of the deal, issuing a statement that approval of the deal would "promote the public interest and benefit consumers." "By advancing U.S. leadership in 4G LTE deployment, the transaction marks another step in our effort to promote the U.S. innovation economy and make state-of-the-art broadband available to more people in more places," said the FCC boss.

Previous leaks have suggested the conditions will put a five year cap on the deal (which means nothing, since it can be renegotiated) and that is prohibits cable companies and Verizon from cross-promoting services in FiOS areas. Neither really does much to protect consumers (especially DSL users) from high prices, or smaller competitors from the combined market power of cable and Verizon.

The problem, as we've been discussing, is that with AT&T and Verizon giving up on landline broadband, cable operators are quickly taking over, and are building a monopoly on the United States broadband market with or without this deal. The deal just adds icing to the cake for Verizon, allowing them to go back into DSL markets they gave up on in order to sell those users more expensive and capped LTE services. Traditionally the FCC has paid empty lip service to caring about these growing competitive problems, so we look forward to seeing exactly what is in these conditions that changes that paradigm.


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