T-Mobile, public interest groups ask FCC to stop Verizon’s deal with cable firms


SAN FRANCISCO, CA - JANUARY 24: A pedestrian walks by a Verizon Wireless store on January 24, 2012 in San Francisco, California. (Justin Sullivan/GETTY IMAGES)
February 22, 2012

T-Mobile and public interest groups on Tuesday urged the Federal Communications Commission to block Verizon Wireless’s spectrum and marketing deal with cable firms, saying the transaction would lead to less competition and higher wireless service fees for consumers.

In filings late Tuesday at the FCC, T-Mobile said the $3.9 billion sale of airwaves to Verizon by cable firms would create “excessive concentration” in the wireless market. Verizon Wireless is the nation’s biggest wireless service provider with more than 100 million subscribers.

Several public interest groups, including Public Knowledge, also asked the FCC to block the deal, expressing concern over a unique cross-marketing agreement between fierce rivals in the business of supplying wireline Internet connections to homes.

Verizon Wireless defended the deal, saying it needs more spectrum to bolster its networks.

“It will put spectrum to work to meet growing demand, and we believe the transfer is in line with goals in the FCC’s National Broadband Plan,” the company said in a statement.

Through the deal, Verizon Wireless and cable companies have begun to cross-promote each other’s services so they can offer what are known as “quadruple plays” — bundles of landline phone, wireless, cable television and high-speed Internet connections to consumers.

That portion of the deal is being investigated by the Justice Department, which is also reviewing the deal because of concern that Verizon Communications may let its FiOS wireline television and Internet service atrophy.

The marketing arrangement “gives rise to serious concern that not only will these providers decline to compete further with one another, they will actively collude with one another,” the public interest groups said in a joint filing.

The Communications Workers of America union told the FCC that it does not oppose the sale of spectrum to Verizon Wireless because it thinks unused airwaves should be quickly put to use to address the capacity problems faced by consumers.

But it asked the agency to ensure that Verizon keeps up its television and landline Internet service and to expand it to cover nearly the whole nation. Verizon Communications has said it won’t expand the service beyond its current footprint of about 14 million homes.

Cecilia Kang is a staff writer covering the business of media and entertainment.
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