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The hearing will be webcast live from the Judiciary Committee's web page or you can attend in person in Room 226 of the Dirksen Senate Office Building in Washington, D.C. The title of the hearing is telling:
The FCC is currently reviewing a massive spectrum transaction where Verizon Wireless will acquire spectrum held by cable companies Comcast, Cox, Time Warner Cable and Bright House. In exchange, Verizon will begin to market cable services in Verizon stores, online and telesales channels. At the same time, the cable companies will start to market Verizon Wireless services.
The details of these joint marketing agreements are central to the proposed transaction, but the attorneys from Verizon and the cable companies are refusing to allow the FCC to see the details of the agreements.
Put simply, what Verizon and the cable companies are essentially telling the FCC is, "Trust us."
And what the other companies and public interest groups are asking the FCC to tell Verizon and its cable partners is just as simple: "Trust, but verify."
And honestly, no one at Verizon, Comcast, Bright House, Cox or Time Warner Cable should have anything to fear if their proposed transaction is truly as pro-consumer as they purport it to be.
But by hiding the details which are central in determining whether or not the transaction is in the public interest, it certainly raises serious questions about the nature of the transaction and the motivation behind it. Otherwise, why is there a need to hide the details from the independent agency in charge of regulating the cable and wireless industries?
p.s. While other companies have formally asked the FCC to deny the transaction, Sprint has not done so. Like other posts on this blog, the opinions expressed are entirely mine, and not necessarily those of my employer.
On Friday, Verizon Wireless, together with Comcast, Bright House Networks and Time Warner Cable announced a proposed $3.6 billion transaction where Verizon Wireless would acquire advanced wireless spectrum from the cable companies and in turn, the cable companies would be able to sell Verizon Wireless products and services, while Verizon Wireless would be able to sell the cable companies' services.
Even though the companies had not made filings at the either the Securities and Exchange Commission, the Federal Communications Commission or the Justice Department, media and analysts were already pronouncing regulatory approval as a mere formality.
The decision, written by a Bill Clinton appointee and joined by two Republican-named judges, is well-reasoned. It also raises a question: Should the FCC have sway over the Internet? (Disclosure: The Washington Post Co. has interests in broadcast and cable television and businesses that depend on the Internet, all of which could be affected by FCC action or inaction.)
For the past eight years, the FCC has rightly taken a light regulatory approach to the Internet, though it believed it had authority to do more. Now that the agency has lost in court, some advocates in the technology industries are urging the agency to invoke a different section of law and subject ISPs to more aggressive regulation, until now reserved for telephone companies and other "common carriers." Such a move could allow the FCC to dictate, among other things, rates that ISPs charge consumers. This level of interference would require the FCC to engage in a legal sleight of hand that would amount to a naked power grab. It is also unnecessary: There have been very few instances where ISPs have been accused of wrongdoing -- namely, unfair manipulation of online traffic -- and those rare instances have been cleared up voluntarily once consumers pressed the companies. FCC interference could damage innovation in what has been a vibrant and rapidly evolving marketplace.
Some oversight of ISPs would serve the public interest as long as it recognizes the interests of companies to run businesses in which they have invested billions of dollars. Transparency and predictability are essential to encourage established companies and start-ups to continue to invest in technologies dependent on the Internet. ISPs, for example, should be required to disclose information about how they manage their networks to ensure that these decisions are legitimate and not meant to interfere with applications that compete with the ISPs' offerings.
Congress should step in to strike the appropriate balance. Enacting laws would take some time, but the process would allow for robust debate. In the meantime, any questionable steps by ISPs will be flagged by unhappy consumers or Internet watchdog groups. If ISPs change course and begin to threaten the openness of the online world, Congress could and probably would redouble its efforts.
I'm interested to see the Washington Post's middle ground on net neutrality. No doubt the consumer groups and the ISPs who have made this issue a cornerstone of their public policy advocacy will both disagree with the Post on this.
