The Department of Justice announced that it has approved the pending spectrum and marketing deals between Verizon Wireless and several other cable companies. The DOJ looked into the concerns regarding the deal by limiting the proposed joint marketing agreements that will let Verizon and cable companies to sell their products in certain areas and give additional oversight.
Consumers Union, which is the policy and advocacy division of Consumer Reports, said that the DOJ’s conditions improved the deal but they are still concerned about the concentration across the wireless, video and broadband markets.
Parul P. Desai, policy counsel for Consumer Union, said that the Department of Justice’s conditions will make the joint marketing deals work better for consumers. He added that consumers must remain vigilant so that the conditions were enforced.
Desai described the deal between the two giant industries as troubling for the consumers. He found it hard to see how the deal improves competition or increases consumer choice in a market that is already dominated by cable/internet monopolies and wireless duopolies.
Verizon wants to purchase spectrum licenses from SpectrumCo, which is a joint venture made up of Comcast, Bright House and Time Warner. Verizon Wireless and the cable companies want to have joint marketing deals with the duration and scope limited by the conditions announced by the Justice Department. According to the joint marketing agreements, Verizon Wireless and each individual cable company are allowed to sell each other’s products in certain areas.
The Consumers Union said that the deal would be advantageous to Verizon as it would add to the company’s domination in the wireless market. It would also result in a loss to cable companies as wholesale wireless competitors. The deal would also provide Verizon with a disincentive from competing in the landline high-speed broadband and video market. It would strengthen its monopoly status in the high-speed broadband market.