SpectrumCo Asks FCC to Transfer Spectrum Licenses to Verizon

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Verizon Wireless and SpectrumCo, the consortium of cable operators, officially asked the Federal Communications Commission to transfer the cable operators 122 wireless spectrum licenses to the wireless phone provider.

In the public interest statement from the two explaining why the FCC should allow the transfer of the licenses, Verizon and SpectrumCo argue that the deal "will enable Verizon Wireless to add network capacity to meet growing demand, so that customers will continue to enjoy the high-quality, high-speed services that state-of-the-art wireless broadband technology can provide." The cable companies – Comcast, Time Warner Cable and Bright House Networks -- have concluded that "constructing and operating a standalone facilities-based wireless network with that spectrum would not provide a return that would warrant incurring the substantial costs and risks involved." The spectrum represents 20 MHZ in 120 markets, except Houston, which has 30 MHZ. The parties point out that it is simply a license transfer of spectrum not currently being used, so there are no nonspectrum assets like facilities or customers and no reduction in choices for wireless service in the affected areas. As a result, they argue, the FCC's review should be expedient and limited since there are no anticompetitive effects, they say, adding: "The spectrum transfers comply with all Commission rules, require no waivers, and will not result in any violation of the Communications Act or any other applicable statutory provision." While the companies say the sale would help relieve some of the spectrum capacity crunch, they say Verizon will still need more and still supports the FCC plan on reclaiming 500 MHZ from broadcasters and others.

Benton Foundation Chairman and CEO Charles Benton said: "The Benton Foundation urges the Department of Justice and the Federal Communications Commission to closely review the Verizon- SpectrumCo transaction and marketing agreements with a keen eye on the implications for competition, consumer choice, wireless and pay TV prices, and innovation in both wireless and wireline services. We are concerned that Verizon Wireless’s spectrum holdings may grow so concentrated as to prevent new competitors from entering the wireless marketplace."

"It is critical that the FCC be prepared to act if the application and the agreements raise the possibility of anti-competitive coordination, said Harold Feld, legal director of Public Knowledge. “While it is important to get spectrum into productive use, the possibility that this may create 'backdoor' channels by which competitors may divide the market and keep out potential new entrants is very real. The FCC has authority to insist on reviewing the associated agreements, whatever the parties may say."

“No matter how forcefully Verizon claims that this is ‘a spectrum only transaction,’ it is much more than that. The FCC’s mandate is to look at the totality of the circumstances to decide if a proposed transfer is in the public interest. This one raises serious questions about the state of competition in both the wireless and video markets,” said Media Access Project Senior Vice President and Policy Director Andrew Schwartzman.

Free Press Policy Director Matt Wood said, “The cable cartel’s partnership with Verizon Wireless might be convenient for business, but it will most certainly come with a high cost to consumers. Without real competition for cable or mobile phone service, there's no pressure to lower prices or innovate. For consumers that means no choice but skyrocketing prices and onerous contract agreements while the cartel rakes in exorbitant profits.”


SpectrumCo Asks FCC to Transfer Spectrum Licenses to Verizon Benton Urges Caution in Verizon Wireless-SpectrumCo Deal (Benton Foundation) Public Knowledge Urges FCC to Closely Examine Verizon Spectrum Purchase (Public Knowledge) Verizon “Public Interest Statement” Does Not Allay Concerns About Spectrum Deal With Cable Companies (Media Access Project) Verizon Deals with Cable Cartel Will Kill Competition (Free Press) Verizon asks FCC to quickly approve $3.6B spectrum buy from cable (Washington Post)