July 13, 2012
The Verizon-Cable spectrum sale remains on path for DOJ-FCC approval because it is fundamentally pro-competitive, in the public interest, creates the foundation for a fifth national wireless competitor, puts fallow spectrum to work fastest, and its approval will result in secondary market spectrum sales to other competitors that the DOJ/FCC want to get spectrum.
The recent leaks to the media expressing additional DOJ concerns, and the coordinated letters from the Hill, are apparently orchestrated by the DOJ to increase the DOJ’s perceived negotiating leverage to try and “nibble” some final concessions and conditions from Verizon and the Cable spectrum sellers before the DOJ finally clears the spectrum sale for closing.
The bottom-line here is that the DOJ is not going to file opposition in court to block these obviously pro-competitive secondary market spectrum transactions.
This is not a merger. No competitor is being eliminated. On the contrary, these spectrum transactions enable lots more competition. The Verizon-Cable spectrum transaction, as currently configured, is now a series of integrated secondary market transactions that result in multiple competitors gaining access to spectrum that they need, which will enable them to offer faster and more competitive broadband offerings, greatly benefiting American consumers.
The spectrum sale and marketing agreements are also legally independent of each other, and the marketing agreement is already being phased-in in the marketplace. The DOJ knows that there are many similar cross-marketing agreements operating in marketplace today that have not resulted in anti-competitive problems.
Due process here requires that the DOJ have evidence of the marketing agreements actually yielding illegal anti-competitive outcomes. Holding back clearance of an independent spectrum transaction in order to extract some preemptive broadband Internet regulation via a separate and independent marketing agreement, based on a hypothetical concerns, with no evidence of anti-competitive effect or consumer harm, is not a position that the DOJ would want to try and defend in open court.
At bottom the DOJ is not going to blow up this transaction and all the benefits it offers to competition and consumers, in order to tweak language in the marketing agreement based on hypothetical unproven concerns — when the DOJ could always address any potential problem, if and when it actually arises, with a DOJ enforcement action that respects due process.
Part 10 Verizon-Cable: The Foundation of a Fifth National Wireless Competitor
Part 9 Verizon-Cable Opponents Goading the FCC to Overreach its Authority Again
Part 8 AAI’s Analysis of Verizon Cable is Industrial Policy Not Antitrust
Part 7 Verizon-Cable Hearing Exposes Weakness of the Opposition
Part 6 T-Mobile to FCC: Give us a Do-over and More Spectrum Too
Part 5 Verizon-Cable Senate Hearing: Competitive Facts vs. FreePress Fiction
Part 4 Verizon-Cable: Opponents Need FCC to Overreach Authority
Part 3 Why the Verizon-Cable Agreement is in the Public Interest
Part 2 Why the Verizon-Cable Agreement Increases Competition
Part 1 Verizon-Cable Spectrum: Is FCC Open to Competition?