Thirty-two Democratic House members have sent a letter to the
FCC arguing that the Verizon-SpectrumCo deal "appears to renege" on
the promise of the 1996 Telecom Act to boost cable/phone competition.
While the letter does not oppose the deal, it does say the
deal raises "serious concerns" about competition and consumers that
the FCC should resolve by protecting the public's interest in cable/telco
competition. They are particularly concerned with the cross-marketing
agreements between Verizon and the cable operators -- Comcast, Time Warner
Cable, Cox and Bright House -- which they say are what turn the Act on its head
and will turn energetic competitors into business partners and potentially lead
to reduced investment, job losses, less choice and higher prices.
They also say the agreements could reduce incentive for
Verizon to expand its FiOS deployment. Verizon has been saying for a couple of
years now that it would not be expanding its FiOS footprint beyond its current
markets. The legislators acknowledge that, but say the deal will mean even less
incentive to diverge from that course.
They also claim that a deal that would reduce investment in
competing networks -- a point Verizon and the cable operators do not concede --
would result in the elimination of thousands of middle class jobs.
The letter was sent to FCC Chairman Julius Genachowski and
Attorney General Eric Holder -- both agencies are vetting the deal, Justice for
antitrust issues, FCC on broader, public interest, grounds. Comments are due to
the FCC on the deal by Tuesday, July 10.
Among those signing on to the letter were Louise Slaughter
(D-N.Y.), Jerrold Nadler (D-N.Y.), Peter DeFazio (D-Ore.), Maurice Hinchey (D-N.Y.),
Dennis Kucinich (D-Ohio), Barbara Lee (D-Calif.), Chellie Pingree (D-Maine),
Charles Rangel (D-N.Y.), John Sarbanes (D-Md.), Janice Schakowsky (D-Ill.),
Jose Serrano (D-N.Y.), and Pete Stark (D-Calif.).