Depending on who you ask, the government’s approval of Verizon Wireless’ AWS purchase yesterday is either a good thing or the end of competition as we know it for certain segments of the telecommunications industry.
The Rural Cellular Association (RCA), a group that had a number of concerns about the deal, said its qualms were addressed by the FCC’s proposed conditions, which include strict build-out requirements and an agreement to offer data roaming to its competitors for five years.
“We are supportive of Verizon Wireless’ commitment to offer build-out and data roaming arrangements, and if both conditions are included in the FCC’s order, we will be pleased and of course will support them,” RCA President and CEO Steve Berry said in an email.
Data roaming is a “huge issue” for the RCA’s members, he said. Small carriers with limited network footprints depend on roaming agreements with their larger competitors to provide customers with nationwide coverage, but regional providers say it has been difficult to secure contracts with the likes of Verizon.
On the other side of the opinion spectrum are Public Knowledge and the Communications Workers of America (CWA).
Public Knowledge said Justice Department conditions limiting the duration and scope of Verizon’s marketing arrangements with its cable partners weren’t enough to address the transaction’s impact on competition.
“These conditions fail to adequately address the many harms threatened by the deal, and the approval of this deal raises significant questions for the future of broadband competition policy going forward,” Public Knowledge staffer Jodie Griffin said in a post on the interest group’s blog.
Even with the government’s restrictions, Public Knowledge maintains that Verizon’s spectrum purchase and cable tie-ups will limit competition in both wireless and cable by cementing Verizon’s consolidation of spectrum and reducing the company’s incentive to compete on wireline services.
“Looking forward, there is now no way we can pretend that the broadband market is competitive,” Griffin said.
That sentiment was shared by CWA, the union that has been sparring with Verizon over benefits and wages for workers in its wireline business. The title of the union’s press release says it all: “CWA: Justice Department decision on Verizon-big cable deal destroys competition, jobs.”
CWA contends that the “weak” conditions imposed by the DOJ will result in a monopolistic arrangement between Verizon Wireless and the cable industry and will allow Verizon Communications to permanently halt expansion of its FiOS network.
“Not only have regulators lost their focus on competition, but they again show that jobs get no consideration in telecommunications policy,” CWA said, arguing that “thousands of good-paying jobs will be lost” without continued FiOS construction.
The head of the FCC said yesterday he was prepared to approve Verizon’s acquisition of AWS spectrum from Cox Communications, Time Warner Cable, Bright House Networks and Comcast. The agency’s other commissioners still have to vote on an order clearing the transaction.
That same day, the DOJ announced it had agreed to a settlement with Verizon and the four cable companies addressing antitrust issues with their cross-selling agreements and joint venture.
