Verizon Wireless & Time Warner Snub Regulators, Move Forward With Anticompetitive Deal Before Ruling

CLEVELAND, Ohio - April 13, 2012 -  Verizon Wireless and Time Warner Cable have publicly snubbed the U.S. Department of Justice (DOJ) and the Federal Communications Commission (FCC) by implementing a portion of their proposed joint marketing deal even though the DOJ and FCC are still reviewing the transaction, the Communications Workers of America (CWA) said today.

In December, 2011, Verizon Wireless and the nation’s largest cable companies (Time Warner, Comcast, Cox, and Bright House Networks) announced a deal in which Verizon Wireless will purchase $3.9 billion in wireless spectrum from the cable companies and at the same time enter into joint marketing agreements to promote, market, and sell each other’s products and services. The U.S. Department of Justice and the FCC are currently reviewing this transaction.

Rather than wait the outcome of federal review, Verizon Wireless and Time Warner announced yesterday that it is moving forward with the marketing scheme in Cincinnati, Columbus, Toledo and Dayton, as well as Kansas City and Raleigh.

The joint marketing agreements, which would allow Verizon Wireless and the nation’s largest cable companies to jointly market each other’s products and services, will eliminate competition and consumer choice, raising prices for consumers, lowering service quality, and disrupting the development of high-speed internet infrastructure. 

“Verizon Wireless and Time Warner are enticing customers into their marketing strategy with the promise of $200 rebates, but consumers should be warned that the federal government has not yet approved this transaction," said CWA Vice President Seth Rosen.

As Gigaom reported, “Verizon’s joint marketing pact with the cable providers may be facing some serious scrutiny, but Verizon and its partners don’t seem to have noticed. On Thursday, Time Warner Cable blithely announced they would launch bundled mobile and cable services together in five markets.”

“Making sure the telecom industry stays competitive is critical for consumers, local economies, and technological advancement” Rosen said.  “By ignoring the federal regulatory review, Verizon Wireless and Time Warner are showing their eagerness to collude with each other and limit competition.  They clearly don’t have the public’s interest or consumers’ best interest at heart.”

Elected officials and consumer advocates around the country have raised concerns that collusion between the telecom giants will reduce investment in telecom infrastructure, such as build-out of Verizon’s high-speed FiOS network in urban areas, leading to significant job loss. This short video shows what might be in store for Kansas City, Raleigh and Ohio if Verizon Wireless and the cable giants are allowed to continue with this marketing deal.

Verizon Wireless and the cable companies have refused to divulge the full details of their marketing agreements, which were sent to the FCC with critical elements redacted.  Although industry and consumer groups in the form of a joint letter to the FCC and an online petition that gathered over 145,000 signatures have urged the FCC to get a full, unredacted file from Verizon Wireless, Verizon Wireless and the cable companies have refused to do so.

###

Contact: 

Linda Hinton, 440-333-6363 or 216-544-2226 lhinton@cwa-union.org