Chairman Kohl: Verizon-Cable Deals Raise 'Serious' Concerns

Senate Judiciary Antitrust Subcommittee Chairman Herb Kohl (D-WI) said that Verizon Wireless' bid to buy spectrum and enter into marketing agreements with a group of cable companies raises "serious competition concerns."

"Without reaching any final judgment as to the legality of these transactions under antitrust laws or the Communications Act, I believe these transactions present serious competition concerns, which should be examined closely by your agencies," Chairman Kohl said in a letter to Attorney General Eric Holder and Federal Communications Commission Chairman Julius Genachowski. In considering the spectrum sale, Chairman Kohl urged both the FCC and Justice to consider whether selling a valuable chunk of spectrum to the nation's biggest wireless provider would harm competition. In weighing such transactions, the FCC must determine whether such deals are in the "public interest." "The FCC should be guided by the principle that wireless spectrum is not simply a privately held commercial asset but consists of the public airwaves to be deployed in the public interest," Chairman Kohl wrote. "For this reason, the parties to the transaction bear the burden of proving that it will serve the public interest." Verizon argues that the cable firms are not using the stretch of spectrum, called Advanced Wireless Services or AWS, now and that it would use it to build out its next-generation 4G wireless service. Verizon has pledged to sell two other spectrum licenses if its deal with the cable firms is approved. Chairman Kohl also raised issues with the marketing agreements, noting that Verizon and the cable firms are currently "fierce" competitors in the dozen states where Verizon offers its FiOS fiber Internet, phone and video service. Critics argue that the marketing deals amount to a truce between Verizon and the cable firms and could lead to higher prices and less choice for consumers for wired Internet, phone and video service. Noting the "potential risks to competition," Kohl urged Justice to consider trying to block the marketing agreements from taking hold in areas where Verizon has deployed or is planning to launch its FiOS service if the agency determines that the deals would violate antitrust laws.