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Wednesday’s Senate hearing on Verizon’s spectrum deal with the cable operators certainly isn’t going to be a love fest. Verizon(s vz) and Comcast(s cmcsa) will square off not only against their toughest critics – consumer advocacy group The Free Press and the Rural Cellular Association – but it will also have to fend off the opposition of the unions as well.
The Communications Workers of America and the International Brotherhood of Electrical Workers won’t be testifying before Senate Judiciary subcommittee on the Antitrust, Competition Policy and Consumer Rights, but they’re making their presence known. The two unions said that their members have converged on the capital over the last few days to talk to legislators and hand-deliver letters opposing the deal. In a statement, CWA President Larry Cohen said the spectrum sale and accompanying wireless-cable alliance would mark the end of broadband competition in much of the country:
“The U.S. has dropped to 32nd on broadband speed behind nations like Romania and Lithuania. We need deals with clear commitments on speed, buildout and price for consumers. We need wireline and wireless buildout. This deal will freeze then diminish wireline buildout. In short, we need policy that brings 100 percent of our nation into the 21st Century information-based global economy.”
As you might have gathered the deal isn’t just any ordinary spectrum sale. In addition to buying Comcast, Time Warner(s twc) and Bright House Networks’ 4G licenses, Verizon has enlisted them in a joint marketing pact, which would allow them to divvy up and cross-sell residential broadband and wireless services in markets where Verizon doesn’t have FiOS. We’re already seeing the first evidence of that alliance on the West Coast.
Verizon and the cable operators have said that their partnership and the spectrum sale are completely unrelated and point out that the transfer of airwaves would see licenses that have lain fallow for almost six years put to good use in Verizon’s LTE network. Verizon and Comcast, however, appear to have little choice but address the subcommittee’s questions on marketing deal. In advance testimony submitted to the Senate and obtained by Bloomberg, Verizon General Counsel Randal Milch said, “No customer will see fewer choices or increased prices as a result.”
On Comcast’s blog, EVP of public policy David Cohen portrayed the deal as no different than any other joint marketing agreement like those AT&T(s t) has signed with satellite TV operator DirecTV(s dtv) or with regional phone company Frontier Communications(s ftr). He also contrasted the agreement and spectrum deal with AT&T’s proposed acquisition of AT&T, which went down in flames last year after widespread public and government opposition:
“Unlike the AT&T-TMobile, this transaction involves no consolidation of customers, jobs, assets or operating businesses. It will take spectrum not currently being used and get it to a company that wants to quickly deploy it to consumers. Consumers will benefit from more choice, more competition, and more convenience.”