CWA Slams Verizon/SpectrumCo Deal It Suggests Is Imminent

Says regulators have lost focus on competition, propose deal conditions

By John Eggerton -- Broadcasting & Cable, 8/3/2012 2:37:02 PM

The Communications Workers of America signaled Friday it thought regulators were poised to approve the Verizon/SpectrumCo deal.

"Regulators looking to slam the door on our high-speed future," the group headlined a release slamming both the FCC and DOJ for "seem[ing] to have lost their focus on competition" on a deal they suggested was imminent.

An FCC spokesman said no decision has been made, but the general read in Washington communications policy circles is that the deal will be approved, likely with conditions--preventing Verizon tfrom selling Comcast in its FiOS footprint--and likely within the next month. That is based on the fact that the deal frees up wireless spectrum currently laying fallow -- something that the FCC is trying to do in other areas -- and involves a spectrum sale rather than a merger of companies, though the attendant cross-marketing agreements have deal critics concerned it will be a merging of interests that discourages competition.

CWA sounded like the deal had already been done.

"Regulators are demonstrating a real disconnect between supporting this deal and the Obama administration's goals of affordable high-speed Internet access for all," the group said, "and the good jobs that are necessary to push our sluggish economy forward."

Given that it appears to think the deal is just about done, it added its two cents in the condition department. "The remedy to ensure competition and good jobs is clear: the FCC and DOJ should bar cross-marketing within the Verizon footprint and require Verizon to continue build-out of its high speed FiOS network."

"The CWA press release is totally bizarre," said an FCC official who asked not to be identified, "given that no deal has been reached. CWA has no idea what might be in one if it were to be reached."

Verizon has said it will build out its current footprint per previous plans, but will not go further, something it also signaled a couple of years ago saying there was not a business case for extending beyond its current build-out plans. Critics are concerned that the SpectrumCo deal would ensure it would not change its mind.

That pessimistic statement -- if you are a deal critic -- followed CWA's circulation Thursday of a report it says details Verizon's "abandonment" of some New York regions in its build-out of FiOS.

"New York could be further left behind if the FCC approves Verizon's proposed deal with cable companies that the report shows would destroy competition, increase prices for millions of New York consumers and end the expansion of FiOS, since Verizon would instead be promoting the broadband services of cable companies including Comcast and Time Warner," CWA says.

CWA has also bought TV time in upstate New York -- Buffalo, Albany, Syracuse, Rochester -- for an ad urging Governor Andrew Cuomo to fight the deal.

"This report is not news. There's nothing new," said Verizon spokesman Richard Young. "It's factually untrue and full of holes. It's a rehash of every misleading accusation that the CWA has put forth over the past year. Verizon remains committed to bringing our customers in New York and elsewhere top tier products and services. And we prove it in the marketplace each and every day."

Verizon has proposed buying  $3.9 billion worth of spectrum from the SpectrumCo consortium (Comcast, Time Warner Cable, Bright House) and former SpectrumCo partner, Cox. It has pledged to spin off some spectrum to T-Mobile after the purchase -- to better geographically align their respective holdings -- a move that will reduce its local-market spectrum concentration.