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DOJ Allows Verizon Wireless Cable Deals: Consumers Union Statement

CU expresses concerns about concentration across the wireless, video and broadband markets

August 16, 2012

DOJ Allows Verizon Wireless Cable Deals: Consumers Union Statement
WASHINGTON, DC – The Department of Justice (DOJ) announced today that it would allow the pending spectrum and marketing deals between Verizon Wireless and several cable companies to move forward. The agency addressed some concerns with the deal by limiting the proposed joint marketing agreements that would allow Verizon and the cable companies to sell one another’s products in certain areas and providing additional oversight.

Consumers Union, the policy and advocacy division of Consumer Reports, noted that the DOJ’s conditions improved today’s deal but expressed concerns about continued concentration across the wireless, video and broadband markets.

“The Department of Justice’s conditions will help to make these joint marketing agreements work better for consumers. But moving forward, it is critical that enforcement of these conditions is vigilant,” said Parul P. Desai, policy counsel for Consumers Union. “Today’s deal between two giant industries is still troubling. At best it protects the status quo for consumers. It is hard to see how this improves competition or increases consumer choice in a market landscape already dominated by wireless duopolies and cable/internet monopolies.”

Verizon is seeking to purchase spectrum licenses from SpectrumCo, a joint venture among Comcast, Time Warner, and Bright House, as well as licenses from Cox. Verizon Wireless and the Cable Companies will also enter into joint marketing agreements whose scope and duration were limited by the conditions announced by the Justice Department. The joint marketing agreements would allow each individual cable company and Verizon Wireless to sell one another’s products in certain areas.

Consumers Union previously filed a letter with the FCC saying 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. 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 market.

Desai continued, “At a time when competition in the wireless and broadband markets seems to be contracting, we feel it is critical that policy makers and regulators alike begin to think about how to infuse more competition and consumer protections in to the market.”