Codebreaker

Those Verizon deals with cable companies are drawing investigations

John Moe Dec 22, 2011

The Justice Department is now investigating some deals Verizon made with cable companies earlier this month to see if those deals hurt competition in both the cable and wireless industries. Verizon bought a block of the broadcast spectrum from a consortium of cable companies, led by Comcast for $3.6 billion. Cox Communications, Time Warner Cable, and Bright House all stand to profit from the deal as well. Under the agreement, Verizon and the cable companies will market and sell each other’s services.

The argument against these deals is that it effectively takes the cable companies out of the wireless market entirely, prevents them from ever getting in, and instead gives even more power to Verizon. With the collapse of the AT&T-T-Mobile deal and AT&T’s concurrent failure to expand, this pushes Verizon even further ahead and could make Verizon the nation’s de facto wireless phone company.

Look, I know we talk about spectrum a lot on our show and in this memo. But we only do it because SPECTRUM IS INCREDIBLY IMPORTANT TO UNDERSTANDING ANYTHING HAVING TO DO WITH ANYONE SENDING SIGNALS ANYWHERE.

 

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