DOJ Releases Confidential Information; Verizon/Cable Deal As Bad As We Thought

[Commentary] The Department of Justice released details of Verizon’s and cable companies’ commercial agreements. The DoJ’s Competitive Impact Settlement includes previously confidential details about the deals, which is disappointing to read given the DOJ’s approval and lackluster conditions.

Everything the DOJ mentions in this Statement further emphasizes Public Knowledge’s position that this deal is bad for consumers and potentially crippling for innovation in the broadband and wireless marketplaces. Here are some of the DOJ Statement’s observations about the most anticompetitive consequences of the Verizon/Cable deal. The commercial agreements:

• Harm competition in the video, broadband, and wireless markets because they impair the ability and incentives for Verizon and the cable companies to compete aggressively against each other.
• Contractually require Verizon to have a financial incentive to market and sell the cable companies’ products through Verizon Wireless channels in the same local geographic markets where Verizon also sells FiOS.
• Unreasonably diminish competition between Verizon and the cable companies—competition that is critical to maintaining low prices, high quality, and continued innovation.
• Unreasonably diminish future incentives to compete for product and feature development pertaining to the integration of broadband, video, and wireless services.
• Unreasonably restrain the ability of the cable companies to offer wireless services on a resale basis.
• Unreasonably restrain competition due to ambiguities in certain terms regarding what Verizon can and cannot do to compete in the marketplace.
• The aspects of the JOE unreasonably reduce the companies’ incentives and ability to compete on product and feature development, and create an enhanced potential for anticompetitive coordination.