In a probing an detailed report, the Consumer Federation of America condemned the proposed Verizon/cable merger as a violation of the federal law which has guided telecommunications since 1996. CFA, a coalition of consumer groups totaling perhaps 50 million people, was unambiguous about the merger.
Mark Cooper, CFA's director of research and author of the report, wrote that, "The proposed sale of Comcast spectrum to Verizon and the collaborative agreement between Verizon and the major cable companies mark the end of the competitive promise of the 1996 Act."
Cooper concentrated not on the exchange of spectrum, but on the proposed cross-marketing of TV cable, wireless, landline and Internet, a move, he said, would reduce U.S. communications to a few giant companies. As he wrote:
"Against the background of this very highly concentrated market, Verizon and the cable companies have proposed to declare a competitive cease fire between the two broadband wireline networks... Both have an incentive to use their collaborative venture to undermine the competition from non-collaborators that they face in the local markets."
Verizon and the cable companies insist that the deal is a joint venture rather than a more clearly anti-competitive merger. But, said Cooper, "We disagree. Both the antitrust laws and the Communications Act recognize that joint ventures can have many of the anticompetitive effects of mergers."
If the deal is approved by both the FCC and the Justice Department, the result will be "a cozy duopoly of a local cable company and a local telecommunications company that dominate communications."
The End Of The End Of Competition For Digital Access Service, (CFA report, Jul. 2012)
Consumer Federation adds voice to growing Verizon-cable opposition (Gigaom.com, Jul. 9, 2012)