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Workers, Consumers Raise Concerns Over Verizon Wireless/Cable Deal

March 13, 2012

The IBEW and the Communications Workers of America are criticizing a proposed joint venture between Verizon Wireless and major cable companies that they say will stifle competition and kill jobs.

In January, Verizon Wireless announced plans to purchase $3.6 billion worth of spectrum from a consortium of top cable providers including Comcast, Time Warner Cable, Bright House Networks and Cox. If approved by the Federal Communications Commission, the telecommunications giant would begin offering “quad” play – combined video, Internet, voice, and wireless service.

In comments filed with the FCC, the unions say:

The 1996 Telecommunications Act was premised on the expectation that there would be increased competition … and consumers would benefit from increasingly robust choices for the video, wireless, voice and broadband services…the commission is evaluating a transaction that would appear to reduce such competition by FiOS and cable companies.

Critics, which include competing telecommunication companies and public interest organizations like Public Knowledge, say that the deal would create a near-monopoly for Verizon Wireless, eliminating any effective checks on the company’s ability to raise prices. They also say that they are concerned that the purchase would end the expansion of Verizon’s high-speed fiber-optic FiOS service.

Says Broadcasting and Telecommunications Department Director Martha Pultar:

FiOS is the only all fiber-optic network to homes and small businesses, but it is a direct competitor to Comcast, Time Warner Cable, and other cable companies. If this deal goes through, Verizon will lose any incentive to develop FiOS.

Ending FiOS build-out would not only negatively affect the many communities without access to the service, but would also harm the economy as a whole. According to economists Robert Crandall and Hal Singer, investments in broadband, DSL and cable modem technology added $16 billion to the economy, creating more than 250,000 jobs from 2003 to 2009. And they estimate that investments in broadband could create upwards of 250,000 jobs by 2015.

Says the IBEW in comments prepared for the FCC review:

The [deal] will result in less overall network investment than if Verizon and the relevant cable operators continued to compete to build out their own wireline and wireless platform. Less competition results in fewer jobs.

The deal is currently under review by both the FCC and the Department of Justice. On March 7, the commission ordered Verizon Wireless to make more of its commercial agreements related to the deal available to the public.

Says IBEW International President Edwin D. Hill:

This is a bad deal all around. It is bad for workers who will see anti-worker companies like Comcast get an unfair advantage in the market, bad for consumers who will see their bills rise and bad for communities that desperately need investment in high-speed fiber optics.