FCC Set to Approve Verizon Cable Deal
Though DOJ is More Worried About Competitive Impact
Anonymous sources tell Reuters
that the FCC is likely to approve Verizon's $3.8 billion spectrum and co-marketing arrangement with the cable industry, despite consumer advocate worries that the deal will reduce the incentive for Verizon to compete with cable operators on the landline front. Sprint has also expressed concern
that the deal could grow to reduce incentives to compete in the backhaul market. The Department of Justice appears to be less of a pushover for the cable industry and Verizon, sources telling Reuters
that the DOJ is much more concerned about the potential anti-competitive ramifications of the deal. From the report:
The Justice Department is skeptical about the marketing deals since they would mean collaboration between Verizon, the largest wireless company, and Comcast, the biggest cable company, according to one of the sources. The fear is that there will be less head-to-head competition which could mean higher Internet and wireless plan prices. The hope had been that Verizon would use its FiOS service to more aggressively push into Internet and cable, and that Comcast and other companies would compete more heavily in wireless products. "They're a problem," said the source, who was not authorized to speak publicly, about the marketing agreements.
The companies have pushed forward with the "quadruple play" co-marketing arrangement despite not yet having regulatory approval. As it stands, cable and phone companies already only barely compete seriously on price. Even before the deal, there had been a noted reduction in aggressive promotional deals between Verizon and cable operators like Cablevision, with Verizon just recently raising most of their FiOS prices
. The new marketing arrangement could spell particular trouble for rural telcos, who already struggle to battle cable operators -- and would now be facing the combined marketing and lobbying muscle of both the cable industry and Verizon.
Re: Joy... So, Verizon should sell their own products within their footprint, including DSL and landlines. Why? Because thats profitable, and sensible. Since we've established that, its also sensible for them to expand FiOS further into other towns/cities within their footprint? Why? Because thats profitable, and sensible.
So if you dont believe they wont sell Cable within their own footprint, then I guess when the DOJ attaches that restriction, Comcast, BH. TW, Verizon, wont fight it. We'll see.
said by ITALIAN926:Yes, because VZ will likely realize larger margins selling its products versus reselling those of other companies.
So, Verizon should sell their own products within their footprint, including DSL and landlines. Why?
said by ITALIAN926:As I continue to suggest, I believe VZ will refocus efforts on its wireline services after ubiquitously deploying LTE infrastructure.
Since we've established that, its also sensible for them to expand FiOS further into other towns/cities within their footprint? Why?
said by ITALIAN926:I don't, and I haven't heard an argument yet the presents a legitimate business motive for VZ to resell a competitors services in its FiOS markets.
So if you dont believe they wont sell Cable within their own footprint
Collusion This is becoming a major problem. The cable companies are providing cellular backhaul for Verizon and now they are making this deal which will likely stop VZ from continuing any FIOS build out. So VZ will have cellular voice and data in shared markets and will also market the triple play of the MSO's. The MSO's will have their own triple play and will also market the cellular products of VZ. They might as well all be one big company and we'd be back to the 70's with Ma Bell.
Re: Here146;s what should have happened133;
said by Steve Mehs:IMHO That would have been an excellent approach, unfortunately that didn't happen and perhaps it will never happen.
The big three cable companies, Comcast, Time Warner and Cox, should have come together and purchased either Sprint or T-Mobile with each cable company owning a one-third steak. This way the cable industry would have a real quad play option and really come up with some innovative integration. I love bundling, but I think its retarded when you bundle services from more than one company.