May 16, 2012
In a letter to the U.S. Department of Justice (DOJ) and Federal Communications Commission (FCC), the mayors of nine upstate New York cities – Albany, Binghamton, Buffalo, Cortland, Elmira, Kingston, Syracuse, Troy, and Utica —expressed deep concern today that the secretive deal between Verizon Wireless and some of the nation’s largest cable companies would have a devastating impact on their communities.
Under the proposed agreement, Verizon Wireless and major cable companies will jointly market each other’s products—allowing them to offer a “quadruple play” of video, internet access, voice, and wireless service that would eliminate competition for the cities’ consumers. Verizon Wireless would also pay $3.9 billion to buy large segments of the wireless spectrum from Comcast, Time Warner, Cox, and Bright House Networks.
The proposed deal would deter any expansion of Verizon’s high-speed fiber-optic FiOS network, killing thousands of jobs and exacerbating the digital divide. Though FiOS is widely available in New York City and affluent suburbs, the deal would remove any incentive for Verizon Wireless to provide high-speed service to the state’s other urban centers. In effect, the agreement would put people of color and low-income communities at a disadvantage as consumers become increasingly dependent on high-speed internet for access to education, economic development, and critical services.
“We are deeply worried that the anti-competitive partnership between Verizon Wireless, the nation’s largest wireless provider, and four of the leading cable companies will have a negative impact on economic development and job creation in our cities, leading to higher prices, fewer service options, and a growing digital divide, “ the letter reads. “As you review the Verizon Wireless/cable transaction, we strongly urge you to examine the impact of this transaction on competition and consumer choice, and ensure that our communities are not left behind.”
In the face of mounting public concern over the proposed deal, the FCC decided to “stop the clock” on its 180-day review of the deal earlier this month, giving regulators more time to consider the potential impact of the deal on consumers and under-served communities. In March, coalitions formed in cities across the Northeast where Verizon has failed to build its high-speed FiOS network – including Buffalo, Syracuse, and Albany – to oppose the Verizon/Big Cable deal.
Today’s letter follows in full:
May 16, 2012
The Honorable Julius Genachowski
Federal Communications Commission
445 Twelfth Street, SW
Washington, DC 20554
The Honorable Eric H. Holder
U.S. Department of Justice
950 Pennsylvania Avenue, NW
Washington, DC 20530
Dear Chairman Genachowski and Attorney General Holder,
As the mayors of the major urban centers in upstate New York, we write to express our concerns with the Verizon Wireless/cable company alliance that your agencies are currently reviewing.
We are deeply worried that the anti-competitive partnership between Verizon Wireless, the nation’s largest wireless provider, and four of the leading cable companies – Comcast, Time Warner Cable, Cox, and Bright House Networks – will have a negative impact on economic development and job creation in our cities, leading to higher prices, fewer service options, and a growing digital divide.
In December 2011, Verizon Wireless and the four cable companies announced a transaction that includes not only Verizon’s purchase of wireless spectrum but also joint marketing agreements in which the parties agree to promote, market, and sell each other’s products and services and to form a joint venture to develop, on an exclusive basis, proprietary new technologies.
Our cities are the largest population centers in New York State, after New York City. Collectively, more than 650,000 people, thousands of businesses, major medical centers and universities, a vibrant financial sector, a strong manufacturing base, as well as the state capital, are located in our upstate New York cities. However, broadband and cable infrastructure which are so vital to economic growth, jobs, and the social fabric have not kept pace.
Verizon has not built its all-fiber FiOS network in any of our densely-populated cities. Not in Albany, Buffalo, Syracuse, Binghamton, Kingston, Elmira or Troy. Yet, Verizon has expanded its FiOS network to the suburbs ringing Buffalo, Albany, Troy, and Syracuse, as well as many places in the Hudson Valley, and most of downstate New York. As a result, the residents and businesses in our cities are disadvantaged relative to their more affluent suburban neighbors who have access to Verizon’s FiOS, providing competitive choice in high-speed broadband and video services.
As you are well aware, high-speed broadband is critical to economic development and job creation, as well as improvements in health care, education, public safety, and civic discourse which is so essential to communal life. The economic health of our cities and our upstate region depends upon access to the same first-rate communications infrastructure available to the New York City metropolitan region and the suburban communities that ring our cities. Despite Verizon’s past refusal to build its FiOS network in our cities, we were hopeful that this situation would change because, as Verizon’s top executives recently noted, FiOS’ strong financial performance would lead the company to “fill in” gaps in its FiOS network.
But now, as a result of the Verizon/cable joint marketing agreements, we fear that Verizon will never build its FiOS network in our cities. These commercial agreements appear to eliminate any incentive that Verizon might have had to expand its all-fiber network to our high-density urban centers. After all, Verizon Wireless, a subsidiary of Verizon Communications, will now be able to sell Time Warner’s video and broadband service as part of their bundled package in our communities.
Moreover, Verizon recently announced that it will no longer sell stand-alone DSL services. This leaves the citizens and businesses in our cities and region captive to the dominant cable and broadband provider, which in our region is Time Warner Cable. Without consumer choice and competitive alternative, consumers and businesses will experience rising prices for video, Internet, and voice telephony services, less innovation, and reduced quality of service.
In addition, thousands of good, middle-class jobs that would otherwise be needed to build, maintain, service, and sell the Verizon FiOS network will go away. These jobs are vital to our region.
As you review the Verizon Wireless/cable transaction, we strongly urge you to examine the impact of this transaction on competition and consumer choice, and ensure that our communities are not left behind.
Byron W. Brown - Mayor, City of Buffalo
Stephanie A. Miner - Mayor, City of Syracuse
Gerald D. Jennings - Mayor, City of Albany
Matthew T. Ryan - Mayor, City of Binghamton
Shayne R. Gallo - Mayor, City of Kingston
Susan Skidmore - Mayor, City of Elmira
Brian Tobin - Mayor, City of Cortland
Robert Palmieri - Mayor, City of Utica
Lou Rosamilla - Mayor, City of Troy