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Cable Technology Feature Article

August 20, 2012

Verizon Cable Deal Gets Justice Department Approval

By Rory Lidstone, TMCnet Contributing Writer

Verizon's tentative deal with four of the U.S.'s largest cable companies —Comcast, Time Warner Cable, Bright House Networks and Cox (News - Alert) — has drawn a lot attention because some feel that it could stifle competition for both high-speed Internet and cable TV. Specifically, union leaders and local mayors fear that the deal will stop Verizon from deploying more of its FiOS (News - Alert) fiber optic system that has been competing with the likes of Time Warner.

It's too early to say if these fears are true, but the deal is one step closer to being finalized as the Justice Department's antitrust division has approved the Verizon cable deal. Union leaders should be happy to hear that the approval featured some conditions, most notably that Verizon (News - Alert) Wireless stores are not allowed to sell TV and broadband services from the cable companies participating in the deal in areas where Verizon sells its own TV and broadband services.

In terms of home broadband, Verizon Communication's FiOS fiber service, which offers fast home Internet and TV access with high definition channels such as BBC America, is the only significant competition to cable in many areas. However, FiOS is costly to build and Verizon has seemingly lost interest in continuing to roll the service out.

The Justice Department also placed a five-year limit on the co-marketing agreement, after which time the parties can apply to extend the deal, according to acting assistant attorney general for the antitrust division, Joseph Wayland.

The Verizon cable deal still has to seek approval from the Federal Communications Commission, but since the FCC (News - Alert) did participate in the Justice Department's decision, it seems likely that the deal will see FCC approval fairly soon.

Despite the restrictions placed on the co-marketing agreement, union leaders still worry that it could mean less choice for consumers, adding that the deal could cost the economy good-paying jobs if Verizon stops expanding FiOS.

"Not only have regulators lost their focus on competition, but they again show that jobs get no consideration in telecommunications policy," the Communications Workers of America said in a statement. "Without incentives or direction for Verizon to continue to build out FiOS, thousands of good-paying jobs will be lost."

Edited by Juliana Kenny

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