Senate Probes Verizon-Cable Deal

Excerpt from an article in

TheHill.com

Senate probes Verizon-cable deal 
By Brendan Sasso

The Senate Judiciary subcommittee on Antitrust, Competition Policy and Consumer Rights will examine Verizon's $3.6 billion deal with a coalition of cable companies on Wednesday afternoon.

Verizon agreed in December to buy wireless airwave licenses, known as spectrum, from cable companies including Comcast, Time Warner and Bright House Networks. Under a separate deal announced simultaneously, Verizon and the cable companies agreed to cross-sell one another's services.

"The subcommittee carefully examines questions about competition in the wireless and video markets, with the ultimate goal of protecting consumers and reducing their cable and cell phone bills, and these deals are no exception," Subcommittee Chairman Herb Kohl (D-Wis.) said in a statement announcing the hearing.

The witnesses will be Randal Milch, Verizon's general counsel; David Cohen, Comcast's vice president; Steven Berry, CEO of the Rural Cellular Association; Joel Kelsey, policy adviser for consumer group Free Press; and Timothy Wu, a Columbia University law professor who specializes in Internet, communications and antitrust issues.

Wu served as chairman of Free Press from 2008 to 2011.

The Federal Communications Commission and the Justice Department are probing whether the deals will hurt competition in the wireless industry.

The Rural Cellular Association, other wireless carriers including Sprint and T-Mobile and consumer groups such as Free Press argue the spectrum deal will allow Verizon, the nation's largest wireless carrier, to consolidate its control over the airwaves, stifling competition. The groups also argue that the cross-marketing deals could lead to price-fixing or other anticompetitive behavior.

Verizon said the spectrum deal will help it meet the growing demands of smartphones and tablet computers. The company pointed out that the cable companies have no immediate plans to use the spectrum licenses.