Union warns Verizon cable deal could end competition

Mon May 7, 2012 11:17pm EDT

* CWA says Verizon cable deal worse than AT&T/T-Mobile

* Tells FCC that approval could end competitive landscape

* Argues for conditions to protect and preserve competition

By Jasmin Melvin

WASHINGTON, May 7 (Reuters) - Allowing proposed multibillion-dollar airwave deals between Verizon Wireless and several cable operators could mean the end of a competitive telecommunications landscape, saddling consumers with higher prices and diminished choice, the largest union for telecoms workers told U.S. regulators.

Communications Workers of America has been a vociferous opponent of Verizon Wireless's plan to buy about $3.9 billion worth of wireless airwaves from cable companies including Comcast Corp and Time Warner Cable Inc.

The union met with Federal Communications Commission staff last Thursday and sent a 16-page filing to the agency late Monday detailing its worries over the deals that it has argued would create allies out of former rivals, to the detriment of consumers.

Debbie Goldman, CWA's telecommunications policy director, told Reuters that the alliance between the nation's largest wireless carrier and the top cable companies would essentially end competition in the telecommunications arena.

"The detail of how it will do that is in these commercial agreements that are behind a firewall that the public cannot see," Goldman said of the largely redacted documents submitted to the FCC for review by Verizon Wireless and the cable operators.

Marketing agreements accompanying the spectrum sale would create a joint entity and allow the cable operators to resell Verizon's mobile service as part of the deals.

Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group Plc.

Verizon Wireless has said it strongly believes the deals are in the public interest, and it has worked to ensure the FCC has the data it needs to make an informed decision.

CWA stressed to FCC staff that the commercial agreements and resulting joint entity were intertwined with the spectrum sale, and it would be artificial to separate them from the public interest review.

Goldman said these deals would have far greater implications for competition, jobs and network investment than if AT&T Inc's $39 billion bid for Deutsche Telekom AG's T-Mobile USA had been allowed. That deal fell apart late last year due to strong regulatory opposition from the FCC and Justice Department.

The marketing agreements, according to Goldman, would allow collusion between the parties in such a way that would give them the market power to dominate video, broadband, voice and wireless service.

This would end competition between Verizon and the cable companies and eliminate Verizon's incentive to expand its rival Fios network for high-speed Internet, she said.

Verizon rivals Sprint Nextel Corp, T-Mobile USA and MetroPCS Communications, have all complained to the FCC about the bigger company's cable deal on concerns that it would give too much market power to the already dominant company.

CWA told the FCC that approval of the deals would have to come with conditions to protect and preserve the current competitive market.

Among those conditions, CWA said, should be a commitment to expand Fios, a mandate against cross-marketing services within the Verizon footprint and assurances that competitors would have the same access to the services and intellectual property shared between Verizon Wireless and the cable operators.

A decision by the FCC on the deals is not expected until August this year, and the Justice Department is also probing the deals for any antitrust concerns.

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