Verizon Wireless' $3.6 billion deal to purchase more than 100 spectrum licenses from three of the nation's top cable providers will be examined in an upcoming congressional hearing, the Senate's top antitrust official said today.
"Plans are well underway for a hearing to examine the impact of Verizon's spectrum purchase from a number of cable companies and a separate marketing agreement to cross-sell each other's products," Sen. Herb Kohl, the chairman of the Senate Judiciary antitrust subcommittee. "The subcommittee carefully examines questions about competition in the wireless and video markets, with the ultimate goal of protecting consumers and reducing their cable and cell phone bills, and these deals are no exception."
Last month, Verizon announced plans to purchase 122 Advanced Wireless Systems (AWS) spectrum licenses from SpectrumCo, LLC, a joint effort from Comcast, Time Warner Cable, and Bright House Networks.
The companies involved also signed agreements to sell each others' products and services. Comcast could bundle Verizon Wireless service with one of its packages—get Xfinity triple play plus Verizon Wireless mobile service for one price, for example. Similarly, Verizon Wireless could offer its customers access to Comcast, Time Warner, or Bright House cable and digital phone service in areas where FiOS is not available.
Representatives from Verizon, Bright House, Comcast, and Time Warner declined to comment on Kohl's hearing.
The Verizon-cable company spectrum deal must be approved by the Federal Communications Commission. In a statement last month, a commission spokesman said, "When the applications come before us, the FCC will undertake a thorough, fair and fact-based review of the proposed transaction."
While spectrum might seem like a rather boring topic to the average consumer, its availability could eventually have an impact on how well your mobile devices work. At this point, the wireless carriers have enough spectrum to keep their networks running, but they argue that with more and more people picking up smartphones and other data-hungry devices like tablets, that bandwidth is running low.
Earlier this month, wireless trade group CTIA, of which Verizon Wireless is a member, said that for the first time, the number of wireless subscriber connections surpassed the U.S. population—327.6 million versus 315.5 million—meaning there are more smartphones, tablets, and other wireless gadgets than there are people in the United States.
Rival AT&T has also said it needs more spectrum. It tried to acquire that via the now-failed T-Mobile acquisition, prompting CEO Randall Stephenson to lash out at the FCC during a recent earnings calls.
Stay tuned for more details about the Verizon/cable hearing as it's announced.