Verizon to tell Congress cable deal eases spectrum crunch
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Verizon to tell Congress cable deal eases spectrum crunch

www.reuters.com   | 21.03.2012.

* Verizon, other deal proponents to testify before Congress
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* Verizon, other deal proponents to testify before Congress

* Deal needs OKs from U.S. regulators

WASHINGTON, March 21 (Reuters) - Verizon Communications and Comcast executives, in testimony on Capitol Hill on Wednesday, will defend a joint spectrum and marketing deal as a way for the wireless carrier to deal with a coming spectrum crunch.

Verizon Wireless, the largest U.S. carrier, announced plans on Dec. 2 to pay Comcast Corp and Time Warner Cable Inc $3.6 billion in a spectrum and marketing deal. It reached a similar deal with Cox Communications just days later.

The cable operators would resell Verizon's mobile service as part of the deals.

Opponents of the deal have focused on Verizon's already large spectrum holdings and cross-marketing agreements between Verizon and the cable companies, while some consumer advocates have said the companies should compete against each other, not collaborate.

The Federal Communications Commission and Justice Department must approve the deal. The Justice Department recently blocked AT&T's purchase of T-Mobile USA, a deal that AT&T said it needed to address spectrum shortages.

In prepared testimony, Verizon Communications General Counsel Randall Milch argued that the spectrum being purchased is now unused and badly needed because the explosive use of smartphones, tablets and video and audio streaming is causing a spectrum crunch.

"With this purchase, it will be deployed to provide the additional capacity that consumers, companies, and entrepreneurs need to meet their rapidly growing data demands," he is expected to tell the Senate Judiciary Committee's antitrust subcommittee.

"Data usage on Verizon's network has been more than doubling each of the last three years, and is expected to continue that trend going forward," he said in his prepared testimony.

But Steven Berry, president of RCA, a trade group of smaller wireless providers, urged that the deal have stringent conditions put on it like spectrum divestitures and affordable roaming for smaller competitors. "If these conditions are not included, the transaction must be denied," he said in written testimony.

"Through the spectrum transaction, related marketing deals, and joint venture between the companies, Verizon will not compete for wired services with the cable companies, and the cable companies will not compete for wireless service with Verizon," Berry said in written testimony.

Former antitrust enforcers have said that the marketing deals would create allies out of former rivals, to the detriment of consumers. The Justice Department is known to be looking at the agreements.

Comcast Executive Vice President David Cohen defended the marketing agreements.

"The commercial agreements will provide short- and long-term benefits to consumers," he said in written testimony. "They give the cable companies a path to quickly and efficiently offer wireless services in competition with the multiproduct bundles being offered by AT&T, DirecTV, and other competitors."

Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group Plc.

Lawmakers are also scrutinizing the deals, although they have no official role in the review.

Verizon Wireless rivals, including Sprint Nextel Corp, T-Mobile USA and MetroPCS Communications Inc, have urged regulators to block the Verizon deals. Deutsche Telekom AG's T-Mobile said the deals would result in "an excessive concentration" of spectrum holdings.

Verizon Wireless and AT&T, the No. 1 and No. 2 U.S. mobile providers, have said they need more spectrum to support increased consumer demand for videos and other services that soak up bandwidth.



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