Verizon's proposed spectrum deal with major cable companies came under more criticism today as a broad range of companies and public interest groups asked the Federal Communications Commission to halt proceedings on the deal.
In a letter written to the FCC, the companies and groups said that the FCC needed to force Verizon to submit unredacted documents that include information on "pricing, compensation and marketing strategies" that they say are needed for the FCC to make an informed decision on whether to allow the deal to go through. The letter was signed by representatives from industry heavyweights such as Sprint, T-Mobile and DirecTV, as well as from public interest groups such as Free Press and Public Knowledge that have traditionally opposed telecom mergers.
"As an institutional matter, the Commission cannot allow Verizon and the cable companies to make unilateral determinations that certain information is not relevant to Commission's public interest determination or is too sensitive to be sufficiently protected by Commission safeguards," they wrote. "As a policy matter, the Commission cannot allow the applicants to deny production of evidence for the record without which interested parties would be unable to submit ... fully informed analyses."
The controversy over Verizon's spectrum holdings started last year when Comcast, Time Warner and Bright House agreed to sell Verizon 122 AWS spectrum licenses that covered 259 million points of presence for $3.6 billion. Verizon subsequently worked out a similar deal with Cox Communications involving $315 million in licenses for 20MHz of AWS spectrum. Verizon Wireless CEO Dan Mead said the spectrum purchase "solidifies our network leadership into the future" and would allow Verizon to deliver better 4G LTE services to its users.
But while such a deal would undoubtedly benefit Verizon, it has attracted the attention of government regulators as well as the ire of Verizon's competitors. Last month Sen. Herb Kohl (D-Wis.), who is chairman of the Senate Judiciary subcommittee on Antitrust, Competition Policy and Consumer Rights, announced that he plans on holding a hearing that will put Verizon's spectrum deal with the cable companies under the microscope. News of Kohl's proposed hearing came less than two months after the U.S. Department of Justice revealed that it was also examining Verizon's recent dealings with cable companies to see if they violate antitrust law. In particular the DOJ will look into whether the deals are giving Verizon too much control over wireless spectrum that will be used to build and operate 4G LTE networks.
Both Verizon and AT&T have been employing a wide variety of tactics to gain more spectrum for their LTE networks, including proposing mergers with other spectrum-holding companies, moving their customers off of legacy 2G networks and lobbying Congress to authorize more FCC spectrum auctions. The FCC has projected that growth in wireless data demand will lead to a "spectrum deficit" of 275MHz if no new spectrum is released by 2014. There is currently 547MHz of spectrum available for dual use in mobile voice and data services.