“We’re always concerned about competition,” said Joseph Wayland, acting assistant attorney general for the antitrust division. “That’s why we have imposed these conditions.”
Comcast Executive Vice President David L. Cohen issued a statement saying, “We are pleased that the consent decree that we have negotiated with the Department of Justice preserves the most important goals of the agreements.”
Verizon said in a statement, “We believe we have addressed the Department of Justice’s concerns. We now believe the consumer benefits of the transaction will be promptly realized.”
(The Washington Post Co. operates cable systems in parts of the country; they are not part of the deal with Verizon.)
The FCC must also approve the deal, though it worked closely with Justice officials in developing the conditions announced Thursday, as did the New York state attorney general. The FCC is expected to approve Verizon’s plan to sell to T-Mobile some of the cellphone bandwidth acquired in the cable deal and also to offer roaming to other cellphone companies, according to people familiar with the matter.
Thursday’s Justice Department action won applause from analysts and some members of Congress, who said the new conditions would limit the most worrisome elements of Verizon’s new relationship with the cable companies. But it did not entirely satisfy the loudest critics of the Verizon deal, who complained that federal officials need to be aggressive in ensuring competition for services increasingly deemed essential by Americans.
“Without meaningful competition for broadband, the cable companies will be able to charge whatever they want — and drive consumers to purchase expensive bundles of services they don’t want or need in order to get Internet service,” Sen. Al Franken (D-Minn.) said in a statement.
Rep. Edward J. Markey (D-Mass.), who had also expressed concerns about the Verizon deal, issued a statement praising the new limits and saying, “As with any significant change to the communications landscape, vigorous oversight of implementation is essential to ensure that consumers benefit, competition is promoted and innovation is ignited to the benefit of our economy and job creation.”
The approval of the Verizon deal may prompt calls for more aggressive regulation of the telecommunications industry. The failure of competition to develop over broadband service in most of the country revealed the limits of the federal government’s approach to protecting consumers from a rapidly changing but increasingly crucial industry.
Analysts said there was little the Justice Department or FCC could do to encourage more competition if Verizon was not committed to expanding FiOS. Cable companies, meanwhile, have failed to move into wireless phone services. The landmark 1996 Telecommunications Act envisioned both industries gradually moving into the strongholds of the other, but that has proven daunting to both sides.
“Cable’s infrastructure has essentially won the war on the ground,” said analyst Craig Moffett of Bernstein Research. “At the same time, the wireless companies have won the war in the air.”