Verizon and Cable Cos Keep Playing Games
Verizon and Cable Cos Keep Playing Games
Verizon and Cable Cos Keep Playing Games

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    Verizon and the cable companies have always been reluctant to answer
    the tough questions about their proposed deals to team up rather than
    compete on voice, video, and data services, but now they’re even going
    so far as to try to stop potential opponents of the deals from
    participating in the FCC’s review at all. The FCC shouldn’t indulge
    this kind of gamesmanship and should give all interested parties a meaningful opportunity to make thoughtful, well-informed arguments about these

    Yesterday Verizon and the cable companies filed an objection to try to stop
    Netflix’s outside counsel from reading the companies’
    license transfer, agency, resale, and Joint Operating Entity agreements.

    Why? Because Netflix has not filed a petition to deny opposing the deals.

    Verizon and SpectrumCo are making a pretty technical procedural argument here. They say that only
    “parties” can sign confidentiality acknowledgements to view
    confidential information and that Netflix can’t be considered a party
    because it did not file a petition to deny the transactions.

    So by Verizon and SpectrumCo’s logic, companies or organizations only
    have a right to read the agreements after they’ve submitted formal
    filings opposing the agreements. That is ridiculous. As a general rule
    of thumb, if your interpretation of FCC rules leads you to the
    conclusion that the FCC is encouraging or requiring entities to oppose
    a deal before they know what’s actually in that deal, you probably went off

    This is also, interestingly, the first time Verizon and SpectrumCo
    have brought up this argument, even though every single entity that
    has read the agreements in this proceeding did so before filing a
    petition to deny
    . Some never filed petitions to deny at all: for
    example, the organization TechFreedom obtained access to the
    agreements only after the petitions to deny had been filed, so it
    could file reply comments.

    Why do the companies want Netflix treated
    differently? Likely because Netflix is the first online video company
    to try to enter the fray here, and might end up having some pretty
    persuasive arguments as to how this deal is going to stifle innovation
    and hamper competition in the video market going forward.

    As a online video company whose customers rely on the internet to reach its service, Netflix has a significant interest in examining and speaking out about deals that would hurt competition in in video programming and internet access service.

    More broadly, this fits into part of Verizon and SpectrumCo’s strategy
    for avoiding having to talk about the worst parts of its deal. The
    companies seem to have expected that they’ll have to engage in
    detailed arguments about the spectrum transfer part of this deal, but
    when it comes to the patent-collecting Joint Operating Entity the
    companies’ tactic has been to shroud every possible detail in
    confidentiality to keep it out of the public eye.

    As a result, when companies or organizations (like
    PK) want to explain all of the anticompetitive harms threatened by the
    JOE, they have to redact all of the details of those arguments, and
    Verizon can safely ignore our arguments and trust that it will all fly
    under the radar of the press and public. The basic idea: secrecy
    shields Verizon and SpectrumCo from having to answer for the worst
    parts of their deals.

    Similarly, if Verizon and SpectrumCo can use confidentiality to prevent Netflix from ever
    joining the debate here, they won’t have to face Netflix’s potential
    arguments about why this deal is bad for online video competitors and
    bad for online video consumers.

    It’s clear that Verizon and the cable companies are playing legal games to avoid a conversation they don’t want to have.

    These deals
    have widespread potential ramifications for wireless, wireline, and
    video services, and the FCC should hear from as many affected parties
    as possible as it considers whether to block or condition the deals. The FCC shouldn’t let Verizon and
    SpectrumCo off the hook here: if Netflix has something to say about
    these deals it should be allowed to read the deals so its arguments
    can be informed and therefore much more useful to the FCC.