WASHINGTON – The Verizon-Comcast deal could either restrict competition and raise prices or improve competition and allow customers to get one bill for their cell phones,Internet and cable television services.
That contradiction was before the Senate Antitrust,Competition Policy and Consumer Rights subcommittee at a hearing Wednesday.
Verizon plans to pay $3.4 billion to Comcast,Time Warner and Bright House Networks for cell phone airwaves the three cable companies don’t use. The deal also includes a cooperative marketing agreement that some fear would curb competition and innovation.
“We urge the regulators to ensure that nothing in these deals reverse the historic gains in competition,” Kohl said.
Timothy Wu,professor at Columbia Law School,said,“Over the last decade,Verizon has been the clearest and strongest competitor to the cable industry,and what we face here is a prospect of the elimination of that competition.”
He said Verizon’s 4G LTE technology has been pointed out as a likely replacement for cable.
“It is not clear how selling a cable replacement can be consistent with promoting cable products at the same time,” Wu said.
Joel Kelsey,a policy adviser for Free Press,a nonprofit media reform group,said the deal would affect the competitive structure of the industry and could raise prices for consumers. He said the FCC predicts consumers will have no other option but cable companies for next-generation Internet access.
Randal Milch,Verizon Communications executive vice-president,said Verizon would continue to compete vigorously with cable companies.
“There’s no rationale for saying that we’re going to go halfway,” he said.
Milch said because the deal is between the cable companies and Verizon Wireless it would not affect the parts of Verizon that provide Fiber Optic Service or FiOS,which includes telephone,television and Internet.
David Cohen,Comcast executive vice president,said those who say competition would be affected because of the deal “ignore clear market reality.” He said Verizon announced two years ago it didn’t intend to expand its cable service,and the cable companies have made a business decision not to build a wireless network.
He said the deal wouldn’t break any antitrust laws. It also wouldn’t keep competitors from being able to fight for market share.
“What they are really concerned about is that our agreements will increase competition and compel them to respond accordingly,” Cohen said.
Sen. Al Franken,D-Minn.,asked Cohen if the cable companies have offered AT&T the spectrum. Cohen said they talked to “virtually everyone.”
Kohl was concerned about whether the cable companies and Verizon services could compete if they are all sold at the same stores.
Cohen said the stores would become “additional battleground for FiOS to compete against cable.”
Milch said Verizon will push “as hard as we can” to approve the deal.
Reach reporter Robin Siteneski at [email protected] or 202-326-9868. SHFWire stories are free to any news organization that gives the reporter a byline and credits the SHFWire.