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Verizon, Cable Deals Slated for Senate Hearing

Wed, 02/29/2012 - 6:10am
Maisie Ramsay

The Senate antitrust committee has scheduled a March 21 hearing on Verizon Wireless' $3.9 billion deal to buy a nationwide swath of AWS spectrum from four cable companies.

Wisconsin Democrat Herb Kohl, who heads the committee, said earlier this month he planned to hold a hearing on the transaction but waited until yesterday to place the event on the Senate schedule.

A spokeswoman for Kohl could not provide any comment on the hearing.

Kohl said when he first announced plans for the hearing that "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."

Witnesses have not yet been announced for the hearing, titled "The Verizon/Cable Deals: Harmless Collaboration or a Threat to Competition and Consumers?"

Verizon did not reply to requests for comment by press time.

Kohl led a hearing on AT&T's $39 billion takeover of T-Mobile USA last spring, and later asked the FCC and Justice Department to block the massive acquisition. Another senator on the committee, Minnesota Democrat Al Franken, also came out against the deal.

The FCC and Justice Department ultimately decided to put the brakes on the deal, forcing AT&T to abandon the transaction.

Verizon is shelling out $3.6 billion for 122 AWS licenses held by Comcast, Time Warner Cable and Bright House Networks. Under a separate arrangement, Verizon is paying $315 million for an additional 30 AWS licenses from Cox Communications. The cable companies acquired the spectrum during the FCC's 2006 auction, but eventually gave up on their original wireless plans.

Verizon plans to use the spectrum to supplement its LTE network, which currently runs on its 700 MHz holdings.

The cable operators also forged a side deal with Verizon to cross-sell each other's products. Verizon has withheld details of the marketing arrangement from the public record, to the consternation of its wireless competitors and public interest groups including Public Knowledge.

The FCC and Justice Department are still conducting their reviews of the spectrum sale and marketing agreement. T-Mobile, MetroPCS, the Rural Cellular Association and the Rural Telecommunications Group have asked the government to block the transaction, arguing it would consolidate too much spectrum in the hands of Verizon.

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