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CU files comments opposing Verizon/cable TV deal

March 26, 2012

Consumers Union files FCC comments in opposition to Verizon/cable TV deal
WASHINGTON — Consumers Union, the policy and advocacy division of Consumer Reports, today filed comments with the Federal Communications Commission in opposition to the proposed spectrum deal between Verizon Wireless and the cable TV companies Comcast, Time Warner, Bright House, and Cox.

Parul P. Desai, Policy Counsel for Consumers Union, said, “We strongly believe this transaction does not serve the public interest. If approved, it will lead to the loss of competition and choice for consumers in the video, broadband, and wireless markets. Consumers would likely be saddled with an increase in prices and fewer competitive alternatives.”

Verizon is seeking to purchase spectrum licenses from SpectrumCo, a joint venture among Comcast, Time Warner, and Bright House, while Cox has agreed to sell off spectrum to Verizon. At the same time Verizon and these cable companies have entered into joint marketing agreements, which allow each cable company and Verizon to sell one another’s products.

In today’s filing, Consumers Union said the deal would add to Verizon’s domination in the wireless market and represent the loss of these cable companies as facilities-based or wholesale wireless competitors. As a result, this transaction would eliminate the chance of more choices in the wireless broadband market. At the same time, the transaction would provide Verizon a disincentive from competing in the landline high-speed broadband and video market and strengthen cable’s monopoly status in the high-speed broadband and video market.

Desai said, “With fewer choices for consumers to choose in a duopoly or monopoly market, Verizon and the cable companies would not have incentives to price their products competitively. In tough economic times, it’s in the public’s interest for prices to be as competitive and choices to be as robust as possible. That’s why we urge the FCC to deny this transaction.”