Antitrust chairman raises new questions about Verizon spectrum deal

Sen. Herb Kohl (D-WI), chairman of the Senate antitrust panel, is raising fresh questions about Verizon’s proposal to buy spectrum from cable providers following the company’s decision to stop offering DSL Internet as a stand-alone service.

In a letter sent to Verizon General Counsel Randal Milch, Chairman Kohl said he is concerned about "the potential harm to both competition and consumers that could result" from the decision to only offer DSL in a bundle with other products. Chairman Kohl questioned whether the decision undermines Verizon’s promise that the companies plan to purchase spectrum from cable companies won’t limit consumer choice. Chairman Kohl noted that Verizon didn't announce the discontinuance of standalone DSL until after a hearing his subcommittee held and said the move contradicts Verizon's testimony at that hearing. Chairman Kohl closed the letter with a series of questions, asking when Verizon decided to discontinue stand-alone DSL, whether it had anything to do with the spectrum deal, what Verizon's savings will be from discontinuing stand-alone DSL and the reason for the "price differential" between bundled and stand-alone DSL. He said he expects a response from Verizon within three weeks.

DirecTV sent a letter "expanding on its concerns" about associated commercial marketing agreements between Verizon and the cable operators. DirecTV complains that it was working with Verizon on a next-generation fixed wireless broadband product that they would jointly market with DirecTV's video bundle, a project that was abandoned, DirecTV says, after Verizon entered into the agreements with cable operators to jointly market wireless and video services. It argues that dropping DSL broadband service "continues the pattern of abandoning initiatives that would compete with cable."