Verizon spectrum deal could be bad for consumers

Mar 21, 2012
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Verizon spectrum deal could be bad for consumers

Verizon's plan to buy a bunch of unused mobile spectrum from cable companies could be a huge boost for Verizon, but terrible news for pretty much everyone else in the mobile industry, including you. That was the resounding opinion of experts who spoke before US lawmakers today. The proposed purchase would need to pass regulatory approval, and Verizon's competitors are trying to prevent that from happening.

So at issue is the fact that, under Verizon's plan, it would essentially help to promote four major cable companies in exchange for their help in promoting Verizon. This would lead to low incentives for these competitors to actually compete with one another, and we all know what happens when there is a low amount of competition. Prices get higher for the end consumer. And that's never fun, right? Unless you're a shareholder in the company that benefits.

Digital advocate Joel Kelsey, from Free Press, said in his speech to legislators, "These agreements simply represent a deal between these companies to stay out of each others' way in perpetuity. They put former rivals on the path to cooperation, not competition." In addition to loosening competition among cable companies, it would also hurt mobile competition as well. The Federal Communications Commission has the final say on whether this will happen.

[via Computerworld]


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