FCC Approves Verizon Collaboration with Cable Companies

BY CCIA Staff
August 23, 2012

The Federal Communications Commission released its Order on Thursday approving the myriad of agreements between Verizon and its largest cable competitors.  The Order follows last week’s approval with revisions mandated by the Justice Department.

While the Computer & Communications Industry Association appreciates the time and effort the FCC took to carefully consider these unprecedented agreements, the Commission’s dismissal of the serious public interest concerns raised by consumer groups and smaller businesses is stunning.

Last week, CCIA observed that Justice Department’s remedies were “no match for the powerful business incentives of these dominant network operators/Internet access providers to carve up wireless and geographic landline markets for their mutual benefit.”  CCIA was hopeful that the FCC would rectify these oversights by imposing strong interconnection and interoperability conditions.  However, the FCC has failed to place any meaningful constraints on the nation’s largest communications companies working in tandem to limit consumer choice to their own new “quad play” while raising prices for separate mobile wireless service and home Internet access services.

The following statement can be attributed to CCIA Vice President Cathy Sloan:

“The agreements between the nation’s largest telephone company and the largest cable companies are unprecedented.  Rather than compete as the Telecom Act of 1996 intended, the nation’s dominant broadband Internet access providers have chosen to collaborate.  And now the FCC has given this bad deal its blessing.

“While it is somewhat helpful that the FCC is forcing Verizon to comply in some cases, with new FCC roaming mandates that Verizon is already challenging in court, and wireless buildout requirements that will prevent extended warehousing of spectrum, the order’s extensive cautionary language about anticompetitive and discriminatory practices will not be any match for the powerful incentives of these legacy monopolies to defeat competition. Equally significant to the actual provisions of these complex commercial agreements are the numerous unstated opportunities for anticompetitive collusion that the agreements facilitate and encourage, but that the FCC does not prohibit.

“With today’s green light for an industry applicant that has recently called the FCC “backward looking”, we are moving much closer to an unregulated duopoly in mobile wireless markets and a monopoly in residential Internet access.  Re-monopolization of the U.S. telecom industry could not be more “backward looking.”  Several very healthy large corporations are the winners, some scrappy competitors get some spectrum and anti-bullying scraps, and consumers…Beware!   You may think you deserve affordable mobile and wired Internet access, but you have no rights to it in the U.S. and fewer and fewer options to choose from.”

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