Senators warn FCC, DOJ that Verizon/Big Cable deal is a job-killer

Jul 30, 2012

Washington, D.C. — As opposition to the Verizon-big cable deal mounts, U.S. Senators Barbara Mikulski and Benjamin Cardin sent a letter on Thursday to FCC (Federal Communications Commission) Chairman Julius Genachowski and U.S. Attorney General Eric Holder outlining the harmful impact the current deal would have in Baltimore and across Maryland, and urging the FCC and DOJ (Department of Justice) to consider the negative effects on middle-class jobs and access for low-income consumers.

As currently structured, the job-killing deal that Verizon Wireless and big cable companies are pushing federal regulators to approve would cause Baltimore to lose thousands of jobs and remain on the wrong side of the digital divide, as Verizon drops any effort to bring its world-class all-fiber FiOS network to Baltimore City—even as six wealthier suburban counties enjoy it. (See Communications Workers of America’s [CWA’s] report, Verizon/Cable Deal: Slamming the Door on Our High-Speed Future.)

“Most significantly, the joint marketing agreements appear to limit Verizon’s incentive to invest in its all-fiber FiOS network, potentially depriving consumers of a competitive alternative to cable’s broadband and video services,” Senators Mikulski and Cardin wrote. “People of color and lower-income households in urban and rural parts of Maryland will be disproportionately affected by the decreased incentives to invest in continued ‘build-out’ of the FiOS network.”

“As you review the proposed Verizon/cable company transaction, we encourage you to consider most carefully the comments the FCC and DOJ have received raising concern about the transaction’s potential impact on competition, consumers, and jobs,” they wrote. “We hope that you will endeavor to protect the public interest in cross-platform competition that drives lower prices and higher quality services and ensures that all Americans – including residents and businesses in Baltimore and across the rest of Maryland – have access to the most advanced communications technologies and services at affordable prices.”

Last week, a telephone town hall meeting held by the Communications Workers of America (CWA) attracted nearly 10,000 Baltimore residents, who wanted to learn more about the proposed deal and how it would affect consumers. Senator Cardin called in to the town hall to speak to residents about his concerns surrounding the deal.

“Our concern is that we are turning former competitors into business allies, [and] that may be violating the concept of open and fair competition,” Cardin said. “We also are very concerned… [that] it appears to limit Verizon’s incentive to invest in its all fiber FiOS network, potentially depriving consumers of the competitive alternative to cable, broadband and, video services. What this means is that you are really, could be impacting middle class jobs.”

“We are talking about potentially a significant impact on employment in our region and fairness in our region,” Cardin added. “And we, Senator Mikulski and I, are both calling upon the two principal agencies—the Federal Communications Commission and the United States Department of Justice—to answer these concerns before moving forward.”

Some 100 members of the CWA and concerned Baltimore citizens rallied at City Hall on July 26 to urge Mayor Stephanie Rawlings-Blake and other city officials to oppose the deal, which would eliminate as many as 72,000 middle class jobs in eight Eastern states, including Maryland. With regulators expected to make a decision on the deal later this summer, protestors called on city officials to tell the FCC and DOJ that the agreement should not move forward without conditions to promote job growth and protect competition.

If approved by regulators without conditions, the current deal between Verizon and major cable companies would destroy competition, increase prices for Baltimore consumers and end the expansion of FiOS, since Verizon would instead be promoting the broadband services of cable companies including Comcast and Time Warner.

Baltimore City Council President Jack Young, who spoke at the rally, wrote a letter last week to FCC Chairman Julius Genachowski and U.S. Attorney General Eric Holder expressing his opposition to the current deal and outlining the harmful impact it would have on Baltimore City.

Senators Mikulski and Cardin have added their voices to growing opposition to the current deal expressed by elected officials in Maryland and by dozens of members of Congress over the past several months — along with Boston Mayor Thomas Menino and nine mayors of cities in New York State. Elected leaders cite concerns it would eliminate competition and hamper economic development.

Mikulski and Cardin warn against job-killing Verizon-Big Cable deal (CWA news release, Jul. 30, 2012)