WASHINGTON (Legal Newsline) - The Justice Department announced Thursday that Verizon, Comcast, Time Warner Cable, Bright House and Cox Communications have to change the way they sell bundled wireless and wired services.
DOJ says if they are not changed, market competition will be affected and service will be more expensive and poorer quality.
DOJ's Antitrust Division and the New York State Attorney General's Office filed an antitrust lawsuit in federal court, the same day as the announcement, to prevent Verizon, Comcast, Time Warner Cable, Bright House Networks and Cox Communications from enforcing a series of commercial agreements. It then filed the proposed settlement.
DOJ's ruling came after a coordinated review with the Federal Communications Commission and New York State Attorney General Eric Schneiderman's Office. The department also said that it would allow both Verizon's proposed acquisitions of spectrum from the cable companies and T-Mobile USA's contingent purchase of a significant portion of that spectrum from Verizon to go forward.
"By limiting the scope and duration of the commercial agreements among Verizon and the cable companies while at the same time allowing Verizon and T-Mobile to proceed with their spectrum acquisitions, the department has provided the right remedy for competition and consumers," said Joseph Wayland, Acting Assistant Attorney General in charge of the Department of Justice's Antitrust Division.
DOJ claims the proposed settlement will protect market competition and consumers by removing provisions that would lessen the companies' incentives to compete aggressively in the areas where Verizon's FiOS services offer a critical competitive alternative to the cable companies' video and broadband products.
But not all are convinced. Public Knowledge is a group advocating Internet openness and public access. It criticized the order.
The group's CEO, Gigi B. Sohn said, "By allowing Verizon and the cable companies to sell each other's services, the DOJ and the FCC are acknowledging what has been clear for some time -- that broadband competition policy in the United States has failed.
"For years, policymakers have hoped that 'facilities-based' competition between wired broadband providers would protect consumers, drive down prices and encourage new deployment. It is clear that this promise has not been fulfilled."
Yet, David L. Cohen, Executive Vice President of Comcast Corporation, said in a statement issued by the company, (W)e are pleased that the consent decree that we have negotiated with the Department of Justice preserves the most important goals of the agreements, including Comcast's ability to market Verizon Wireless services throughout our footprint in order to offer our customers a wireless option, Verizon Wireless' ability to market our products in virtually all of our footprint, our ability to opt into an MVNO relationship with Verizon Wireless, and the essential structure of the innovation R&D technology joint venture."