Verizon Wireless and the big U.S. cable companies, including Comcast, have reached an agreement on a deal that, if approved, would kill job growth and leave many consumers and businesses permanently on the wrong side of the digital divide.

Verizon/Cable Deal

Slamming the Door on Our High-Speed Future

Verizon Wireless, Comcast, Time Warner, Cox and Bright House Networks have reached an agreement on a deal that would:

  • Allow Verizon Wireless and the four cable companies to sell each others' products, allowing them to offer a "quadruple play" of video, internet, voice and wireless service and eliminating incentives for Verizon to invest in its all-fiber FiOS network.
  • Form a joint operating entity to develop proprietary technology that will give them a lock on wired and wireless video and internet access.
  • Transfer $3.9 billion in wireless spectrum from the cable companies to Verizon Wireless.

These alliances--if approved by the Federal Communications Commission (FCC) and the U.S. Department of Justice (DOJ)--would limit competition, raise prices, eliminate jobs and end Verizon's deployment of its world-class all-fiber network, FiOS.

Particularly worrisome is the end of FiOS expansion. This will leave many consumers and businesses on the wrong side of the digital divide, and by extension, on the wrong side of economic development, job growth and improvements in education, health care, energy conservation and public safety. To date, Verizon has not deployed FiOS in a number of large- and medium-sized cities in its footprint, including Buffalo, Albany, Syracuse, Boston and Baltimore.

A demographic analysis comparing the populations in these non-FiOS cities with the populations in the suburbs surrounding them--where Verizon has deployed FiOS--demonstrates that people of color and lower-income households are disproportionately impacted by a decreased incentive to invest in FiOS.

Verizon recently announced that it will stop selling stand-alone DSL. As a result, non-FiOS communities will have virtually no broadband competitor to the cable monopoly.

The FCC and DOJ should condition any approval of the Verizon/cable transaction on specific guarantees:

  • Verizon Wireless and the cable companies will not cross-market their services within the Verizon footprint.
  • Verizon must build the FiOS network to 95% of Verizon households in existing markets and increase FiOS buildout in rural and low-income areas.
  • Verizon Wireless and the cable companies make the services they provide to each other and the technology they develop together available to other competitors so their marketing alliance and joint venture cannot lock out competitors.

These conditions will preserve fair-market competition and ensure that giant cable and telecommunications companies aren't allowed to inflate their profits by undermining consumer choice and community development.