Gov't Approves Parts of Verizon-Cable Spectrum Sale

fistfullast33l writes "The Associated Press is reporting that the Justice Department, FCC, and New York State Attorney General approved portions of a deal between Verizon Wireless and cable companies Comcast, Time Warner Cable, Bright House Networks and Cox to sell parts of the wireless spectrum to Verizon for $3.9 billion. However, the Justice Department rejected the agreement between the two groups to allow Verizon to market cable services in its stores in markets where it also offers FIOS service. The spectrum will be used to increase Verizon's 4G LTE network coverage. Verizon will also sell some spectrum to T-Mobile. Consumer groups were very concerned about the cross-marketing by Verizon: 'When it comes to home broadband, Verizon Communication Inc.'s FiOS provides the only significant competition to cable in many areas. Yet FiOS is costly to build out, and Verizon's commitment to the technology has faltered. Consumer groups and unions that opposed the deal between the cable companies and Verizon said it showed that Verizon was further giving up on FiOS and yielding the home broadband market to cable.'"

Comments

opening for Google?

[Trepidity]

If their Kansas-City fiber experiment goes well, perhaps they'll expand into markets Verizon is losing interest in with FiOS.

Re:opening for Google?

[Dyinobal]

Who seriously gets Google Fiber for the TV aspect of it? I dropped my cable subscription years ago, went with my local DSL because my cable company was crap. That trend is growing, plenty of people don't get cable because of the TV aspect but because it is the best way to get broadband for their area.

The rejected part about selling cable TV service

[devjoe]

The part of the deal that was rejected was related to Verizon Wireless selling the cable TV service from Comcast et al. (not FIOS TV) in their stores. This little detail is missing from the summary. Without understanding this, the "Verizon's commitment to the technology has faltered" makes little sense, since it would seem like they were trying to support FIOS if they wanted to sell FIOS TV service through their stores.

That they even considered doing this shows how little Verizon and Verizon Wireless cooperate. They are two separate companies, alike in name only.

Fiber to the premises is too costly

[kriston]

Fiber to the premises is too costly. In relatively built-up suburban areas it can cost between $2000 and $7000 per subscriber. In rural areas it costs between $5000 and $12000 per subscriber. And you wonder why Verizon has stopped building outside of already committed build-outs, and why Verizon has sold entire DSL and FiOS plants to Frontiernet and Fairpoint?

Hybrid fiber/cable as used by cable television companies like Cox and Comcast is far cheaper with comparable actual speed. Naturally with HFC they cannot claim the same theoretical speed but the practical speeds in a modern DOCSIS 3 HFC plant in real life (and not from speedtest.net) is very comparable for far, far less cost to both subscriber and operator.

Re:Fiber to the premises is too costly

[Lord_Jeremy]

You don't have FiOS, do you? In addition to my regular ol' modem, there's a big fibre link and battery backup box bolted to the wall of my basement. Ignoring the fact that fibre line and the splicing is pricey, theres a lot more equipment required for each home, for which Verizon foots the bill.

Re:Amazing

[cpu6502]

>>> that people in a supposedly 'capitalist' society do not see anything wrong with the very idea that government should at all under any circumstances be meddling with any private deals.

If it was free market I would agree, but Comcast is not a free market. It is a natural monopoly and just like the electric, natural gas, water, and sewer monopolies needs to be regulated. Else these monopolies could raise their prices skyhigh & the customers would have no choice but to pay. So the government steps-in to ensure that does not happen.

Of course an alternative solution is to open Comcast's market to outside Cable TV providers (Cox, Time-warner, Cablevision, etc), but so far local and state governments appear unwilling to let that happen. So the closed monopoly market needs to be regulated by the New York PUC.

Re:Amazing

[CheshireDragon]

What don't you understand? The FCC monitors the spectrum and 'owns' the frequencies. They are in charge of how it moves around, sold and used. Yes it is business deals between companies, but it is like...I am not going to use an analogy here. At the end of the day the FCC still 'owns' the spectrum. OK, analogy: It's like an apartment. You rent it, but the apartment still owns it and you can not sublease it.

I may also not understand where you are coming from. So, clarify for me if I am off.

HFC is already everywhere.

[CrAlt]

HFC CATV systems are already everywhere. All comcast has done is buy up local cable companies and upgrade the active equipment. No need to replace the millions of miles of plant out there. DOCSIS3.0 doesn't know the difference between coax from the 1970's or 2012. Most homes are wired for CATV and already have a coax drop running to the street. All comcast has to do it plug them in.

FiOS has to build out from scratch. They have all the labor costs in trenching or hanging the fiber to the house. They have to deal with getting right-a-ways and such. Also splicing fiber is alot more labor intensive then just popping an F-connector on to the end of some rg6.

The cable co makes money back on a sub after a month or 2. VZN has to wait YEARS for payback. If they cancel or switch after a short time then that means they just LOST money. Thats why they are bailing on FiOS. There is quicker money to be made elsewhere.