Verizon needs more wireless spectrum. True. Actually every carrier needs more wireless spectrum.
Verizon struck a deal with cable television companies like Comcast, Time Warner Cable, Cox Communications and Bright House to acquire their wireless spectrum. This deal would help Verizon, but not the competitors in the industry.
This deal makes sense from the Verizon point of view.
Does it makes sense from the cable television companies point of view? If the cable television companies put this up for bid they would more likely earn more. So why aren’t they doing so? Isn’t that in their and their shareholders best interest? Curious.
Why would the cable television companies take a loss on this deal? Could they have bigger plans in store with Verizon that we are not fully aware of yet.
Are these plans compatible with a competitive marketplace or will they put the squeeze on other competitors?
That’s the question being raised by Charlie Ergen, CEO of Dish Networks. He warned House members of the threat that Verizon and it’s cable television MSO partners pose to consumers and competitors through this agreement to jointly market cable and wireless and new services as well.
He said at a hearing on the Future of Video at the House Energy & Commerce Subcommittee on Communications and Technology that they would have a concern if two competitors get together and agree not to compete with each other and stop others from competing with them as well.
There are definitely things that need to be understood and agreed to before anything like this is approved. We would never buy a pig-in-a-poke so why would we ever approve this kind of deal without understanding what it will mean to the competitive industry going forward.
This deal still may be approved if it is both helpful and not harmful, but there are quite a few more hurdles to cross before we know the answer to those questions.
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Please attribute to Jeff Kagan, Tech Industry Analyst with www.jeffKAGAN.com
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Jeff KAGAN| Tech Industry Analyst www.jeffKAGAN.com
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