Verizon cable deal clamps the lid on broadband competition

The nation's top wireless operator, Verizon, signed a deal on December 2 with Comcast, Time Warner Cable and Bright House Networks to buy unused airwaves from these top cable operators. The move, if approved by regulators, crafts a deal with the cable operators to "combine their products and create partnerships around bundling wireless, voice, data and television," and would solidify Verizon's wireless position.

The response was swift and outraged. Mark Cooper, research director of the Consumer Federation of America, said, "This is the end of the world!... Verizon was supposed to be our competitor for Comcast in the wireline space and SpectrumCo was supposed to be a competitor to Verizon and AT&T in the wireless, and now that's all gone."

The report in Gigom interviewed Susan Crawford, law professor and former technology advisor to President Obama, who echoed that sentiment, "So we have the worst of all worlds: no competition, and no regulatory oversight."

The Verizon move makes clear that wireless providers need more spectrum to address the explosion in data and video traffic from smartphones and tablets. This deal would allow Verizon to double, or in some cases, triple the capacity of its 4G LTE network.

The Verizon move follows closely on the heels of the FCC's decision to block the AT&T/T-Mobile merger, which was all about getting more spectrum to increase network capacity, reduce dropped calls, and enable faster broadband connections. It shows that the FCC's failure to recognize this reality in the AT&T/T-Mobile merger will ultimately harm competition and consumers. Verizon's deal, if approved, would strengthen Verizon's dominant position in wireless,  while foreclosing cable and high-speed broadband competition in many markets.

In the light of this latest move, Speed Matters believes that regulators should address the competition issues related to the AT&T/T-Mobile merger so that the deal can go forward to benefit American consumers and workers, while taking a close look at the Verizon-cable deal's impact on video and broadband competition.

Verizon's spectrum deal with cable is the end of broadband competition (gigaom.com, Dec. 2, 2011)

The New Digital Divide (The New York Times, Dec. 4, 2011)