Senator Kohl letter to FCC: stop Verizon cross-marketing

WASHINGTON, D.C. -- The Communications Workers of America (CWA) voiced strong support for the letter Senator Herb Kohl sent today to Attorney General Eric Holder and Federal Communications Commission (FCC) Chairman Julius Genachowski, urging a prohibition on cross-marketing arrangements in the Verizon footprint, and raising concerns that the company will lose incentives to bring its high-speed fiber optic FiOS service to new areas if the deal between Verizon Wireless and large cable operators goes through.

"Senator Kohl's letter is right on target," said CWA Telecommunications Policy Director Debbie Goldman. "As he makes clear, regulators should prohibit Verizon Wireless and big cable companies from cross-marketing in the Verizon footprint, and ensure the deal under consideration does not lower Verizon's incentive to bring FiOS to new areas that currently don't have access to it. Federal regulators need to take these concerns seriously and impose these and other pro-competitive conditions on the proposal since, as Senator Kohl says, they are not in the public interest."

Public concern about the deal is mounting, with growing numbers of elected officials, consumer advocacy organizations, civil rights organizations, industry competitors, telecom workers, and individual consumers voicing their opposition to the venture. Boston Mayor Thomas Menino has detailed the economic dangers of the deal for urbanareas in comments to the FCC, and earlier this month nine mayors of cities in New York state signed on to a letter to the Department of Justice and the FCC, expressing deep concern that the deal would have a devastating impact on their communities.

Under the proposed agreement, Verizon Wireless and major cable companies will jointly market each other's products--allowing them to offer a "quadruple play" of video, internet access, voice, and wireless service that would eliminate competition for the cities' consumers. Verizon Wireless would also pay $3.9 billion to buy large segments of the wireless spectrum from Comcast, Time Warner, Cox, and Bright House Networks.

Excerpts:

He urges a prohibition on cross-marketing in Verizon footprint, and says: "I urge your agencies to seriously consider taking action to prohibit these marketing agreement from taking effect in the area in which FiOS is currently deployed, orin which VErizon has received approval from local franchise authorities to build FiOS... The marketing agreements also raise competitive concerns with respect to areas inside the Verizon 12-state footprint not currently served by FiOS. Once gain, your agencies should scrutinize whether these agreements will result in any incentive for the parties to lessen their level of competition for these services in these areas."

He raises concerns about VZ incentive to deploy FiOS in new areas, and says, "A substantial question arises as to whether these agreements lessen Verizon's incentive to deploy FiOS into new areas, thereby depriving those consumers of the benefits of competition."

Senator Kohl letter to the FCC and DOJ (May 24, 2012)