Two House Democrats from New York made a late push last week for regulators to block the proposed $3.6 billion spectrum deal between Verizon and a coalition of cable companies. Reps. Jerrold Nadler and Brian Higgins said Friday that the government should ensure the confidential side marketing agreements attached to the deal wouldn't impede competition in the pay-TV and wireless broadband markets. The lawmakers made their comments on a conference call organized by the Communications Workers of America, which opposes the deal on the grounds it could jeopardize the jobs of some union members at Verizon. The two were also among the 32 House Democrats that wrote (PDF) to the Justice Department and Federal Communications Commission raising concerns about the deal last month.
DOJ and the FCC are both reviewing the deal for possible antitrust violations, and negotiations have reportedly picked up in recent weeks between the companies and regulators. Officials' concerns about distribution of spectrum appear to have been mostly appeased since Verizon agreed to sell blocks of spectrum at auction and to competitor T-Mobile USA if the deal is approved. The side marketing agreements are more problematic, and are reportedly the main hurdle to the deal's approval. Potential solutions include forcing Verizon to keep offering its FiOS broadband and TV service in some markets and restricting the cross-promotional agreements in those markets. Regulators are reportedly concerned specifically about the potential alliance between Verizon, the country's largest wireless carrier, and Comcast, the nation's largest broadband provider and owner of NBC Universal. Given the concerns about vertical integration raised during the Comcast-NBC merger, we expect at least some conditions to be placed on the transaction. Whether they will have any impact is debatable, as critics have already begun expressing disappointment with Comcast's track record of adhering to both the letter and spirit of the conditions placed on its takeover of NBC.
Google to Steer Users to Legal Movies, Music: Google announced plans Friday to tweak its search engine so it directs users to legitimate copies of movies, TV shows, music and other intellectual property available online. The announcement was hailed by the recording and movie industries, which have long pinned the blame on the search giant for encouraging online piracy by refusing to delete links to pirated content. Google has maintained that individually deleting links would not be effective and would result in censorship of the Internet. But this latest announcement is further evidence that even as the content industries have lost sway in Washington, they retain significant influence over other stakeholders in the digital space. How Superfast Internet Will Change Kansas City: With Google poised to start offering fiber-optic broadband Internet access in Kansas City, Mo., next month, The Economist took a look at the one city in America where such super-high-speed connections are already available: Chattanooga, Tenn. Once a manufacturing city with the country's dirtiest air, Chattanooga is today reinventing its self as "Silicon Holler," a burgeoning hub of the tech industry. While most residents don't take advantage of the fastest available access, they still enjoy much faster connections than the average American. The increased speed and reliability has opened doors for entrepreneurs and provided a myriad of benefits for the unusually wired civic government in Chattanooga, providing a potential preview for Kansas City. Google's proposed network drew significant interest from a number of municipalities, but ultimately K.C. won out. If the network takes off as expected, the city may soon be known for more than just great BBQ ribs. CRS Report on Broadband and the Digital Divide (PDF) FTC May Stop Settling Without Admissions of Guilt: After finalizing settlements with Facebook and Google last week over alleged violations of consumer privacy, the Federal Trade Commission indicated it may stop allowing companies to settle such charges of wrongdoing while denying they did anything wrong. The practice has become commonplace in recent years, as tech firms have been targeted for misleading consumers about their privacy practices and have agreed to implement privacy regimes to avoid further punishment. With several of the leading social media companies such as Facebook and Google now bound by the terms of the settlement agreements, they could potentially be fined by the FCC for every day of every violation. Google recently found out the agency takes its privacy watchdog role seriously when the FTC fined the search giant $22.5 million for bypassing the privacy settings of Apple's Safari browser. But the search giant was allowed to deny that it misrepresented itself to users. The FTC didn't close the door to such denials in the future, but said they would be "strongly disfavored."