D.C. Consultants Look To Kibosh Spectrum Sale

Cable-centric Verizon deal-breakers have a plan, seek funding 5/14/2012 12:01:00 AM Eastern

Forewarned is, as they say, forearmed. The
phrase may not have been born for major cable operators,
including the top two MSOs, but it applies
as they face what could be a new front in the fight for their
sale of advanced wireless spectrum to Verizon.

In the wake of the FCC’s decision to briefly stop
the clock on its consideration of the sale, Washington-
based consultancy Information Age Economics
is pitching “smaller” competitors to those
cable companies in a strategy to block the deal.

“We are forming an action plan…seeking support
for this analysis and report preparation from
wireline carriers, wireless operators and public interest
groups,” IAE said, adding the effort should
not be very expensive, particularly if spread out
over “multiple entities” looking to kibosh the deal.

The report would be subject to those carriers’
“review, improvement, and final approval.” IAE’s
services would include an ex parte pitch of the “deliverable”
to the FCC from the report’s sponsors.

Putting their heads together to work up the IAE
action plan are marketer Barry Goodstadt, former
FCC chief economist Alan Pearce and management
consultant Martyn Roetter, among others. While Goodstadt
said he has been in talks with some smaller telcos about
funding the campaign, he would not identify them.

IAE suggested that the filings deal opponents have been
unconvincing, weak and even “pathetic,” citing FCC officials,
former regulators and policymakers for that handicapping.

The tenets of the new “cable cartel”-themed plan include:

• Painting a bleak picture of future broadband performance,
coverage and prices in a cartel-like supply environment.

• Offering up evidence that broadband services are already
less expensive and more advanced in a number of
other countries than in the U.S.

• Detailing the impact of “sub-optimal broadband” on innovation,
global competitiveness, and employment.

• Painting an unflattering portrait of “the traditional,
recent and likely future behavior and
actions of the members of the cartel,” including
highlighting contradictions between statements
by operators and Verizon about how competition,
not collaboration, guarantees competition.

One of the many miscalculations, Goodstadt
and company argue, is a focus on the impact on
wireless companies rather than wired—the potential
funding market IAE is targeting.

“Wireline operators, which will be threatened
as much if not more by the potential
cartel, have yet to join the opposition, which
has been led by wireless operators focusing
narrowly…on wireless issues alone,” IAE said.

The American Cable Association, which
represents the small and mid-sized operators
IAE is targeting, has not yet weighed in on the
spectrum deal, though it has sought and received access to documents covered by the FCC's protective order. ACA had no comment on whether
its members had been contacted by IAE.

A cable-centric attack on the deal would resonate with
Sen. Al Franken (D-Minn.), who has been one of Comcast’s
strongest critics. Last week, Franken pushed the FCC and
the Department of Justice to take into account Comcast’s
recent FCC losses in the Bloomberg TV and Tennis Channel
complaints when it decides whether to approve the deal.

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