Verizon Wireless' pending spectrum deal with four cable companies—which includes a joint venture with its former rivals—isn't going over smoothly with regulators or its critics.
Verizon Wireless' pending spectrum deal with four cable companies—which includes a joint venture with its former rivals—isn't going over smoothly with regulators or its critics. The Federal Communications Commission, one of two regulators that must approve the $3.9 billion deal between Verizon and cable companies Comcast, Time Warner Cable, Bright House and Cox, has requested the parties provide more information and turn over material that was previously redacted from the commercial marketing agreements filed with the FCC. The companies must provide the information by March 22.
In addition to the requests for more information, the FCC extended the reply comments filing deadline until March 26, giving interested parties more time to chime in about the game-changing transaction.
Since Verizon announced the potential agreements at the end of last year, public interest groups and several of Verizon's wireless competitors, including Sprint, T-Mobile, and DirecTV, raised red flags, especially over the agreement's potential impacts on wireless competition. The marketing deals create a joint venture between two would-be wireless competitors, allowing Verizon and the cable companies to sell each other's products and services.
The FCC's action today gave critics of the deal some hope that the FCC's Wireless Bureau—the same bureau that took a hard line with the AT&T/ T-Mobile deal—will give the Verizon plan more scrutiny.
“By extending the comment deadlines and ordering Verizon and the cable companies to disclose some of the information that was previously and unnecessarily redacted, the FCC is helping to ensure the public has the opportunity to voice its concerns about these competition-killing deals," said Derek Turner, the research director for Free Press, in a statement. "As we learned in the AT&T/T-Mobile merger review, parties seeking regulatory favors are prone to hiding the truth about the harms of these transactions."
Verizon has argued in its filings and in public statements that the FCC and the Department of Justice should only consider only the spectrum sale in their review. Although Verizon provided information about its side marketing arrangements to the DOJ, much of the material submitted to the FCC was redacted, leaving critics steaming because they couldn't analyze it for its public interest impact. Earlier this week, critics called for the FCC to stop the 180-day review clock on evaluating the deal until Verizon provides the unredacted file.
Even with the FCC's order, critics may not be able to examine Verizon's marketing deals with the cable companies if submitted under a protective order. "The commission should make certain that a transaction like this, which could shape the national broadband market, receives the closest scrutiny possible from the public," said Gigi Sohn, the president and CEO of the public interest group Public Knowledge, in a statement.
Verizon responded in a statement: "We believe getting previously unused spectrum into the hands of consumers is strongly in the public interest. We will continue to respond completely and rapidly to the questions about both the spectrum transfer and the separate cross-marketing agreements at the FCC and DOJ, thereby demonstrating the benefits they bring to consumers. We anticipate that the process being pursued by the FCC will result in a positive conclusion within the 180-day period set for consideration of the transfer of the spectrum licenses."
Congress is also suspicious about the effect the Verizon-cable deal might have on competition in the wireless business. Sen. Herb Kohl (D-Wisc.), the powerful chairman of the Senate antitrust subcommittee has scheduled a hearing on the deals for March 21.