Lawmakers on the Senate Judiciary Antitrust Subcommittee grilled executives from Verizon and Comcast on Wednesday over a proposed spectrum deal, which critics charge would hurt competition in the pay-TV and high-speed Internet markets. Under the deal, Verizon Wireless would pay $3.6 billion for unused spectrum held by Comcast, Time Warner Cable and other cable providers. The two sides also signed confidential side agreements, details of which haven't been disclosed, to market each other's products. Public interest groups and rival companies such as T-Mobile say the deal would solidify Verizon's position on top of the wireless market and make it harder for smaller firms to compete, while at the same time potentially eliminating Verizon's FiOS service as a competitor for the cable providers.
CQ's Ambreen Ali reports that committee member Al Franken, D-Minn., said the agreement suggests Verizon and the cable firms had decided to stop competing with each other. Verizon executive vice president Randal Milch dismissed that notion, stating that FiOS is a separate business from the wireless side and isn't involved in the deal. Comcast executive vice president David Cohen agreed, labeling the agreements "ordinary" and saying that no merger or acquisition is taking place. But a representative of smaller wireless firms argued that the deal is about market share and is effectively a non-compete agreement between the two sides. Subcommittee Chairman Herb Kohl, D-Wis., and Judiciary Chairman Patrick Leahy, D-Vt., both urged investigators at the Justice Department and the Federal Communications Commission to carefully evaluate whether the proposal violates antitrust laws. IPO Bill Headed for Senate Vote: CQ's Niels Lewsniewski reported yesterday that the Senate moved closer to passing the small-business capital bill (HR 3606) that would make it easier for startups to issue securities without triggering SEC reporting requirements and eventually go public. Democrats offered two germane amendments, for which votes are expected on Thursday morning. One amendment would place more restrictions on the bill's "crowdfunding" provision, while the second would likely require many new companies to register with the SEC. Democrats have said the bill lacks sufficient investor protections, but the majority is under pressure to pass the bill thanks to the public support of the White House. CQ's Ben Weyl reports that the bill is likely headed back to the House if the Senate passes it today as expected. The Senate voted to cut off debate yesterday on an amendment from Rhode Island Democrat Jack Reed that would require the SEC to include "beneficial owners," such as investors in a mutual fund that holds stock in a company, when counting the number of shareholders in a company. The financial industry is strongly opposed to the amendment and says it would essentially wipe out the intent of the bill. The underlying legislation would raise the threshold on the number of investors a firm can have before it triggers SEC reporting requirements. Napolitano Makes Dire Prediction on Cybersecurity: CQ's Rob Margetta reports that Secretary of Homeland Security Janet Napolitano made a grim prediction Wednesday about what would happen if Congress fails to pass cybersecurity legislation that authorizes her department to set new security standards for critical infrastructure providers. Napolitano told lawmakers on the Senate Homeland Security Committee that she believes the U.S. will suffer a major infiltration or attack in the next 18 months, after which critical infrastructure will be revealed as a gap in network security. Napolitano's statement is typical of the often heated rhetoric used to warn lawmakers of the imminent threat of a massive cyberattack. But cybersecurity experts have said the predictions are mostly true, and several fear Congress will not take the issue seriously until an attack causes significant economic damage or loss of life.Ranking member Susan Collins, R-Maine, who has cosponsored a bill (S 2105) that would authorize DHS to regulate cybersecurity at critical infrastructure providers, said she doesn't want to pass a bill that only covers information sharing, the approach favored by the House. Collins has been a consistent ally of Homeland Security Chairman Joe Lieberman, I-Conn., and Senate leadership during the cybersecurity debate, but her position leaves her at odds with most of her Republican colleagues. While Democrats are adamant something must be done about critical infrastructure, the House appears highly unlikely to pass the type of sweeping new regulations included in the Lieberman-Collins-Rockefeller bill.
No New Extension Coming for Real ID: DHS has no plans to extend the deadline for states to comply with a secure driver's license standards program known as Real ID, the head of the DHS Policy Office said Wednesday. CQ's Rob Margetta, again, reports that David Heyman told the House Judiciary Subcommittee on Crime, Terrorism and Homeland Security that his department doesn't plan to extend the current Real ID deadline of January, and will issue final guidance in about a month on how states can comply with the law. Congress passed Real ID in 2005 (PL 109-13) but the deadline for the law to go into effect has been delayed three times, once under President George W. Bush and twice under President Obama. GOP subcommittee members, including Chairman Jim Sensenbrenner, accused DHS of hindering implementation of Real ID. There also remains doubt whether all states can make the deadline, after which the federal government would officially stop accepting non-compliant IDs. Former assistant secretary of policy at DHS Stewart Baker, now a partner at the law firm Steptoe and Johnson, warned that the penalty for noncompliance is too high, and said people would likely be scared if the government stopped accepting their ID.