April 26 (Bloomberg) -- Democrats in the U.S. House of Representatives asked for a hearing on Verizon Wireless’s proposed $3.6 billion purchase of airwaves from a group of cable companies led by Comcast Corp. and Time Warner Cable Inc.
The airwaves sale and related cross-marketing agreements may have implications for competition in the wireless industry, California representatives Henry Waxman and Anna Eshoo said in a letter today to Fred Upton, the Michigan Republican who is chairman of the Energy and Commerce Committee. Waxman and Eshoo said they have taken no position on the purchase.
Verizon, the largest U.S. mobile provider, announced on Dec. 2 the purchase of unused airwaves from Comcast, Time Warner Cable and closely held Bright House Networks LLC. The companies pledged joint marketing. On Dec. 16 Verizon announced a $315 million airwaves purchase and marketing agreement with closely held Cox Communications Inc.
“It is important that the Energy and Commerce Committee examine the policy implications of these deals carefully,” Waxman and Eshoo said in the letter.
The accords make allies of cable companies pushing into the phone business and Verizon Wireless, whose parent has entered cable’s traditional video business. Waxman, the senior Democrat on the Commerce Committee, and Eshoo, the top Democrat on the Subcommittee on Communications and Technology, addressed their letter to Upton and Greg Walden, the Oregon Republican who is the committee chairman.
Opponents have said the deals would result in reduced competition and higher prices. Verizon said the spectrum purchase will give it airwaves needed to meet soaring demand from smartphones and data-hungry tablet computers such as Apple Inc.’s iPad.
The deals are under review by the Federal Communications Commission and Justice Department. Opponents including the Communications Workers of America have asked the FCC to delay its consideration of the deal. Verizon has said no delay is warranted.
Verizon has said consumers will benefit from purchasing communications services in a bundle, and opponents have said the deals will increase concentration and bring disincentives for competition between mobile providers and companies supplying service over wires, Eshoo and Waxman said.
Walden has said he plans to examine who owns airwaves and their use, the lawmakers said.
“Any analysis of these important issues would be incomplete without an examination of the proposed Verizon spectrum purchases,” Waxman and Eshoo said.
Debbee Keller, a spokeswoman for Republicans the Commerce Committee, didn’t immediately return an e-mail and telephone call seeking comment. Ed McFadden, a Washington-based spokesman for Verizon, didn’t immediately respond to an e-mail and phone call.
Verizon said on April 18 it will sell other spectrum licenses it bought in 2008 if it can complete the purchase under scrutiny. The timing of the sale announcement isn’t tied to the progress of the spectrum purchase at the FCC, Peter Thonis, a Verizon spokesman, said in an e-mail that day.
Verizon Wireless, based in Basking Ridge, New Jersey, is 55 percent-owned by Verizon and 45 percent-owned by Vodafone Group Plc, based in Newbury, England.
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