FCC Makes Verizon and Cable Operators Submit Unredacted Marketing Agreements

The FCC Thursday ordered Verizon Wireless, the SpectrumCo partners and Cox to file mostly unredacted versions of the marketing agreements they signed as part of a broader deal that includes the sale of AWS licenses to the carrier. The letter (http://xrl.us/bmxh5j) was signed by Wireless Bureau Chief Rick Kaplan and outlined a ruling that had been sought by opponents of the spectrum deals. He asked Verizon Wireless and the cable operators for the documents by the end of Monday.

"After an initial review of the proposed spectrum license transfers as well as the commercial agreements between Verizon Wireless and several cable companies, the Commission staff has concluded that portions of the commercial agreements are inseparable from the proposed license transfer and related wireless competition issues,” an FCC spokesman said late Thursday. “Consequently, those portions of the commercial agreements will be examined within the license transfer proceeding."

"At first glance, this is an extremely important development,” said Andrew Schwartzman, senior vice president of the Media Access Project. “Those of us who have opposed the transaction have argued that it is not possible to ascertain the potential anti-competitive impact of the cable industry’s deal with Verizon without the information [they] refused to disclose.”

Kaplan also sent letters to all of the companies involved asking for extensive amounts of data for the agency to examine as it considers the proposed deals, as was expected. SpectrumCo is a venture of Comcast, Time Warner Cable and Bright House Networks, and each of the companies received letters. The agency also extended from March 12 to March 26 the deadline for filing reply comments on the deals, as some groups with concerns about the deal had sought.

Rural Cellular Association President Steve Berry also welcomed the order. “As the largest spectrum-only transfer the FCC has reviewed, the negative impact on the wireless community and consumers could be far greater than has been alluded to by Verizon,” he said. “It is important that we not only understand the marketing plans on the video and content side, but also the impact these plans and the related spectrum transfer would have on 4G wireless service."

"We believe getting previously unused spectrum into the hands of consumers is strongly in the public interest,” a Verizon spokesman said. “We will continue to respond completely and rapidly to the questions about both the spectrum transfer and the separate cross-marketing agreements at the FCC and DOJ, thereby demonstrating the benefits they bring to consumers. We anticipate that the process being pursued by the FCC will result in a positive conclusion within the 180-day period set for consideration of the transfer of the spectrum licenses.

Cable company members of SpectrumCo said they believe the sale is in the best interest of consumers and will continue to work with the government to complete the transaction. “We believe both the proposed sale of spectrum to Verizon Wireless and our commercial agreements ... are in the best interest of customers,” a Time Warner Cable spokesman said. A Comcast spokeswoman said the company has presented compelling evidence that the proposed spectrum transaction is consistent “with the Commission’s, Congress’ and the Administration’s policy goals,” and “that the commercial agreements provide substantial customer benefits without reduction in competition.” A Cox spokesman said the company will continue to comply with the approval process. A Bright House spokesperson didn’t comment.

"Verizon should be required to show whether it is going to have spectrum shortages,” said Public Knowledge President Gigi Sohn. “Comcast should be required to provide plans to prove it actually considered entering the wireless business. All of the companies should provide full documents to show the extent of the joint marketing arrangements. We remain concerned, however, that much of the information will be submitted under a protective order and not available for public inspection. The Commission should make certain that a transaction like this, which could reshape the national broadband market, receives the closest scrutiny possible from the public."

"As we learned in the AT&T/T-Mobile merger review, parties seeking regulatory favors are prone to hiding the truth about the harms of these transactions,” said Free Press Research Director Derek Turner. “We are confident that a full record will conclusively demonstrate that Verizon and the cable cartel’s plans to divide and conquer the communications markets are nothing but bad news for competition and innovation. The air of inevitability is quickly dissipating, leaving the FCC and the Justice Department no choice but to reject these deals.”