The four cable companies Verizon Wireless is buying AWS spectrum from have filed a rebuttal with the FCC to claims made by Sprint that the deal would adversely affect fair competition in the backhaul and Wi-Fi offload markets.
Sprint worries that Verizon will garner agreements with the cable companies, giving it preferential access to the cable companies’ extensive Wi-Fi networks, as well as backhaul.
Referencing an economic analysis of the deal prepared by Mark Israel provided to the FCC today, Cox Communications, Comcast, Time Warner Cable and Bright House Networks argued that Sprint has failed to provide evidence that their commercial agreements with Verizon will harm backhaul or Wi-Fi competition.
The cable operators contend that the deal does not include any provisions that would prohibit them from providing backhaul services to any other party, or that prohibit Verizon Wireless from purchasing backhaul services from any provider other than one of those cable companies involved in the deal.
With respect to any disruption of the Wi-Fi offload market, Sprint argued in a letter to the FCC that should Verizon “enjoy exclusive or preferential access” to the cable providers’ extensive Wi-Fi systems, it would disadvantage competing wireless carriers for whom that Wi-Fi option would be foreclosed, especially in many indoor hotspots where the cable companies have exclusive access.
The cable companies argue that such a market is nonexistent in the first place.
“There is no current Wi-Fi offload market, and thus no market to regulate,” they said in their FCC filing. “Wi-Fi ‘offload’ services – that is, if wireless carriers purchase Wi-Fi services to divert traffic that would otherwise be carried over their networks in order to help reduce network congestion – are not currently sold and are not being provided by the [cable companies] directly to any wireless provider, including Verizon Wireless.”
The report goes on to note that anyone can enter the Wi-Fi marketplace, and because Wi-Fi is an unlicensed service, companies can freely create their own Wi-Fi hotspots without FCC approval.
“If a market develops for Wi-Fi offload services, there is no reason to believe the MSOs could impede entry,” the report states.
In a letter to the FCC, Sprint had argued for a number of regulatory restrictions should the Commission decide to approve the $3.9 billion sale of AWS spectrum to Verizon Wireless, including an intolerance of any preferential treatment between Verizon and the cable companies. Sprint is asking the FCC to ensure that inherent in a deal would be stipulations that the cable companies must offer other wireless carriers the same terms and conditions for their services that they offer other carriers.
