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Letter to Chairman Upton and Chairman Walden, Chair of Committee on Energy and Commerce and Chair of the Subcommittee on Communications and Technology

Letter

By:
Date:
Location: Unknown

Today, Energy and Commerce Committee Ranking Member Henry A. Waxman and Communications and Technology Subcommittee Ranking Member Anna G. Eshoo sent a letter to Energy and Commerce Committee Chairman Fred Upton and Communications and Technology Subcommittee Chairman Greg Walden requesting a hearing on recently announced spectrum transactions involving Verizon's proposed acquisition of Advanced Wireless Services (AWS) spectrum licenses from several cable companies as well as Verizon's conditional sale of the company's 700 MHz A and B block licenses.

The full text of the letter is below and also available online here.

April 26, 2012

The Honorable Fred Upton
Chairman
Committee on Energy and Commerce
2125 Rayburn House Office Building
Washington, D.C. 20515

The Honorable Greg Walden
Chairman
Subcommittee on Communications and Technology
Committee on Energy and Commerce
2125 Rayburn
House Office Building
Washington, D.C. 20515

Dear Chairman Upton and Chairman Walden:

We are writing to urge you to hold a hearing on recently announced spectrum transactions involving Verizon's proposed acquisition of Advanced Wireless Services (AWS) spectrum licenses from several cable companies as well as Verizon's conditional sale of the company's 700 MHz A and B block licenses. Although we have not taken a position on any of these proposals, we believe it is important that the Energy and Commerce Committee examine the policy implications of these deals carefully and hear testimony from opponents and supporters of these transactions.

On December 2, 2011, Verizon announced a series of interrelated agreements with SpectrumCo, a partnership between Comcast, Time Warner Cable, and Bright House Networks.[1] In addition to the acquisition of SpectrumCo's AWS spectrum by Verizon, the parties to the transaction also announced agreements to cross-market each others' services and a new joint venture to develop technology to integrate wireline and wireless offerings. On December 16, 2011, Verizon announced a similar deal with Cox Communications to acquire AWS spectrum and enter into cross-marketing agreements.[2] On April 18, 2012, Verizon announced that contingent upon regulatory approval and closing of the AWS spectrum acquisitions, the company would sell its 700 MHZ A and B block licenses.[3]

Verizon argues that the acquisition of AWS licenses will create consumer benefits resulting from the deployment of an allocated but unused block of spectrum and the convenience of purchasing bundled communications services.[4] In contrast, opponents assert a number of potential harms from the Verizon and cable company transactions, including further concentration in the wireless industry and disincentives for competition between wireline and wireless broadband.[5]

These transactions have potential implications for competition in the wireless industry. Regional carriers continue to report difficulty reaching roaming agreements with national carriers and assert these transactions will further consolidate Verizon's market power over roaming agreements.[6] Small and regional carriers also argue that a lack of access to interoperable wireless devices in the lower 700 MHz bands has hindered their deployment of 4G wireless service.[7] The FCC recently issued a Notice of Proposed Rulemaking (NPRM) with the goal of "promot[ing] interoperability and encourage[ing] the efficient use of spectrum in the Lower 700 MHz band;"[8] some of these carriers have suggested that Verizon's proposed sale of 700 MHz A and B block licenses may create new impediments to achieving interoperability and contravene the FCC's stated goals in the NPRM.[9]

We were encouraged when we heard Chairman Walden state recently that the Communications and Technology Subcommittee will engage in a close review of spectrum issues this year, including "who has it, who's using it, who's sitting on it, what are the needs, and what's the value."[10] We respectfully submit that any analysis of these important issues would be incomplete without an examination of the proposed Verizon spectrum transactions.

Thank you for your consideration of this request.

Sincerely,


Henry A. Waxman
Ranking Member

Anna G. Eshoo
Ranking Member
Subcommittee on Communications and Technology


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