Consumer advocates remain worried that Verizon's co-marketing partnership and spectrum deal with the cable industry contains either a documented or undocumented "gentlemen's agreement" that Verizon will limit future expansion of FiOS to prohibit more intense landline broadband competition. As we discussed, that would mean that the company's already stalled FiOS upgrades would remain that way as a courtesy, in exchange for being able to sell LTE service to millions of new cable customers.
T-Mobile, Sprint and DirecTV are also worried about the competitive impacts of the deal, and are urging the FCC to take a closer look. Verizon and Comcast have voluntarily provided some additional detail on the deals in a new FCC filing, though the majority of what was disclosed is private to the public, and there's certainly no guarantee a non-compete agreement was even put in print.
As they have in every instance where regulators have tried to actually regulate, Verizon is arguing the FCC lacks the authority to do anything about the marketing arrangements should the FCC find something they don't like in the deals:
Verizon Wireless and its partners argued that commercial agreements do not need FCC approval and "have no bearing on whether the spectrum sale is in the public interest" so they do not need to be part of the FCC review...The partners also told the FCC that the spectrum license agreement and the commercial agreements "are not contingent upon each other" so either could go ahead even if the other were not approved, according to the filing.
As we've noted the Verizon cable deal is of particular concern of smaller telcos like Windstream, CenturyLink, Frontier and Fairpoint. Such companies already lack the funds to seriously upgrade their networks to compete with faster cable speeds, and now have to deal with Verizon LTE services that in some instances offer faster speeds than these telcos' landline services. There's an added layer of insult for Frontier and Fairpoint since Verizon convinced them to gobble up unwanted Verizon networks and debt -- only to now face Verizon returning to these markets to erode those customer bases.The combined marketing muscle of Verizon and Comcast (or Time Warner Cable) would likely erode already weak competition in many of these more-rural markets. Unfortunately, regulators have shown time and time again that they're perfectly ok with uncompetitive landline markets, so it seems unlikely that Verizon and their new cable BFFs have much of anything to worry about from a regulatory angle.
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