Verizon-Cable Monopoly

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The 1996 Telecommunications Act promised consumers competition between telephone and cable companies in exchange for deregulation. But in December 2011, Verizon Wireless, a subsidiary of Verizon Communications, inked an alliance with the nation’s largest cable companies—Comcast, Time Warner, Cox, and Bright House Networks—to sell each others’ product and services. The Verizon Wireless/Big Cable alliance will lead to reduced investment in infrastructure, job losses, fewer choices, and higher prices for consumers.

The Verizon Wireless/Big Cable partnership will end historic competition between formerly energetic rivals. The result will be market domination by an unregulated telecom behemoth with the ability to raise prices and reduce service, unconstrained by competitive pressures.

Until now, Verizon Communications has systematically built out its all-fiber FiOS network, competing directly with cable’s broadband and video services. FiOS is a financial powerhouse for Verizon, representing 63 percent of consumer revenues, with an annual growth rate of 18 percent. More than 5 million customer subscribe to FiOS Internet (36 percent penetration) and 4.4 million purchase FiOS TV (32 percent penetration).

But with commercial agreements with Big Cable that eliminate this competition, Verizon now has little incentive to continue investing in FiOS. This will leave about one-third of Verizon’s in-region customers without FiOS, and result in thousands of job lost.