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Consultants Pitch Action Plan to Verizon’s Opponents

5/14/2012 12:01 AM Eastern

Forewarned is forearmed. Major cable operators,
including the top two MSOs, could face a new front
in the fight for their sale of advanced wireless spectrum to
Verizon.

Washington-based consultancy Information Age Economics
was using the FCC’s decision to briefly stop the
clock on its consideration of the spectrum sale to pitch
“smaller” competitors to those cable companies on a
strategy to block the deal.

“We have formulated an action plan, which is ready to
be launched…We are seeking support for this analysis and
report preparation from wireline carriers, wireless operators
and public interest groups,” the consultancy said.

IAE added that it should not be very expensive, particularly
if spread out over “multiple entities” looking to
kibosh the deal.

The report would be subject to those carriers’ “review,
improvement and final approval.” IAE’s services would
include an ex parte pitch of the “deliverable” to the FCC
from the report’s sponsors.

In addition to marketer Barry Goodstadt, also working
up the action plan are Alan Pearce, a former FCC chief
economist, and management consultant Martyn Roetter.

Goodstadt said he has been in talks with some smaller
telcos about funding the campaign, but he would not
identify them.

IAE suggested that, so far, the filings from opponents of
the deal had been unconvincing, weak and even “pathetic,”
citing FCC officials, former regulators and policymakers
for that handicapping.

One of the miscalculations, Goodstadt and company
argued, is a focus on the impact on wireless, rather than
wired, companies, the potential funding market IAE is targeting.
“Wireline operators, which will be threatened as
much if not more by the potential cartel, have yet to join
the opposition, which has been led by wireless operators
focusing narrowly, as just noted, on wireless issues alone,”
they said.

The American Cable Association, which represents the
small and midsized operators IAE is targeting, has not yet
weighed in on the deal, though it has sought and received
access to documents covered by the FCC's protective order.

ACA had no comment on whether its members had
been contacted by IAE.

If the broadband prowess of SpectrumCo (Comcast,
Time Warner Cable, Bright House) and Cox become the
subject of hits along the following lines, it could be IAE at
work.

“The core of this action plan will involve the development
of a body of evidence and analyses that is much more
powerful and compelling than the narrowly wirelessfocused
material already presented to the FCC,” IAE said.
“We will clearly and unequivocally
demonstrate
the cartel-like nature and
intent of the arrangements
between Verizon and the
Cable MSOs.”

The themes of that “cable
cartel” plan include:

• Painting a bleak picture
of future broadband
performance, coverage
and prices in a cartel-like
supply environment.

• Offering up evidence
that broadband services
are already less expensive
and more advanced in a
number of other countries
than in the U.S. “as distinct
from mobile voice minutes,
which are the prices
regularly cited by Verizon
and AT&T to argue that
U.S. consumers are better
served than elsewhere.”

• Detailing the impact of
“sub-optimal broadband”
on innovation, global
competitiveness and employment.

• Painting an unflattering portrait of “the traditional,
recent and likely future behavior and actions of the members
of the cartel,” including highlighting contradictions
between statements by cable ops and Verizon about how
competition, not collaboration, guarantees a competitive
market.

That cable-centric attack on the deal would resonate
with Sen. Al Franken (D-Minn.), who has been one of
Comcast’s strongest critics. Last week Franken pushed the
FCC and DOJ to take into account Comcast’s recent FCC
losses in the Bloomberg TV and Tennis Channel complaints
when it decides whether to approve the deal.

GSN COMPLAINT GETS FCC HEARING

Last October GSN, owned by Sony
and DirecTV, complained to the Federal
Communications Commission after
Cablevision Systems moved it to
a less-viewed pay sports tier, while
favoring similarly situated networks
We TV and Wedding Central, in which
Cablevision had a financial interest.
(Wedding Central shut down last
July.) Last Thursday, the FCC’s media
bureau designated the complaint for
a hearing before an administrative
law judge. Cablevision responded:
“It should be obvious to anyone that
a channel showing game shows and
one showing women’s ... programming
are not comparable. We will
vigorously defend against this preposterous
FCC finding.” GSN, home
to Jerry Springer’s Baggage,
said the hearing order spoke
for itself.

 

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