The FCC Thursday asked Verizon and SpectrumCo for more information on joint marketing agreements and on Verizon's agreement to buy spectrum from cable operators. The marketing agreements are with Comcast, Bright House and Time Warner Cable (SpectrumCo) and Cox.
It has also delayed the deadline for replies and comments on the deal from March 12 to March 26 to provide time for adequate review of the additional information.
The FCC said late Thursday it was opening a separate inquiry into competitive questions surrounding those marketing agreements.
"After an initial review of the proposed spectrum license transfers as well as the commercial agreements between Verizon Wireless and several cable companies, the Commission staff has concluded that portions of the commercial agreements are inseparable from the proposed license transfer and related wireless competition issues. Consequently, those portions of the commercial agreements will be examined within the license transfer proceeding," said an FCC spokesman in a statement. "The additional competitive implications of the commercial agreements are being reviewed in a separate inquiry. This administrative approach will facilitate the fair, timely, and thorough review of the proposed transaction and agreements."
"We have presented compelling evidence that SpectrumCo's proposed sale of spectrum to Verizon Wireless will promote the public interest by transferring spectrum to a company that will efficiently put it to use to meet consumers' increasing demand for broadband mobility, consistent with the Commission's, Congress', and the Administration's policy goals," said Comcast in a statement, "and that the commercial agreements provide substantial consumer benefits without any reduction in competition. We will continue to cooperate with the Commission's review of these matters and look forward to a timely resolution."
"At first glance, this is an extremely important development," said Andrew Schwartzman of Media Access Project. "Those of us who have opposed the transaction have argued that it is not possible to ascertain the potential anti-competitive impact of the cable industry's deal with Verizon without the information that refused to disclose."
MAP and others have argued that Verizon and the cable ops that the marketing agreements, in which Verizon will market their cable services while they add Verizon wireless to their bundles, need to be fully vetted by the FCC, while Verizon and cable companies say they are separate from the license transfer that is at issue in the deal before the FCC.
"We are very pleased that the Commission is following an aggressive course in asking for more information for a deal that could create a new communications cartel in this country," said Public Knowledge president Gigi Sohn. "Verizon should be required to show whether it is going to have spectrum shortages. Comcast should be required to provide plans to prove it actually considered entering the wireless business. All of the companies should provide full documents to show the extent of the joint marketing arrangements."
But Sohn is concerned the additional information will still be under a protective order, meaning while the FCC will be able to see it, the public won't. "The Commission should make certain that a transaction like this, which could reshape the national broadband market, receives the closest scrutiny possible from the public."
