Keeping Low-Income Consumers in Mind While Reviewing the Verizon Spectrum Buy

[Commentary] The Benton Foundation joined a number of public interest advocates asking the Federal Communications Commission to block the deal.

Paramount for Benton is the disproportionate effect the deal will have on low-income users. Bills for basic services make up a greater proportion of the paychecks of low-income users, so any price hikes would have a disproportionate impact on them. As the FCC recently found, if quality voice service is not affordable, low-income consumers may subscribe to voice service at the expense of other critical necessities, such as food and medicine, or may be unable to purchase sufficient voice service to obtain adequate access to critical employment, health care, or educational opportunities. And if low-income consumers initially subscribe to phone service, but intermittently lose access because they cannot consistently pay for the service, many of the benefits for individuals and the positive externalities for the economy and society will be lost. With the reduced competition for wireless, pay-TV, and wireline broadband services resulting from this deal, there’s less hope that competitive market forces will check the prices these companies can charge for their services. After the transactions, there will be no possibility that the cable companies will enter the wireless market, and it is unlikely that Verizon will build out new landline or fiber infrastructure in the covered markets. Furthermore, the joint agreements between the companies will give them a formidable advantage that will make it difficult for any existing competitors to continue their service, much less for new competitors to enter the market. These concerns are heightened for low-income, wireless subscribers.