Cable Operators

Verizon/SpectrumCo Critics Hammer Telco Over DSL Decision

5/17/2012 1:54 PM Eastern

Verizon's decision earlier this month to discontinue standalone DSL service has provided ammunition to critics of its deal to buy advanced wireless spectrum from cable's SpectrumCo.

DirecTV Wednesday sent a letter "expanding on its concerns" about associated commercial marketing agreements between Verizon and the cable operators. DirecTV complains that it was working with Verizon on a next-generation fixed wireless broadband product that they would jointly market with DirecTV's video bundle, a project that was abandoned, DirecTV says, after Verizon entered into the agreements with cable operators to jointly market wireless and video services.

It argues that dropping DSL broadband service "continues the pattern of abandoning initiatives that would compete with cable."

On another front, Sen. Herb Kohl (D-Wis.), chairman of the Antitrust Subcommittee and a critic of the SpectrumCo deal, has written to Verizon seeking answers on why it chose to scrap standalone DSL and the timing of the decision.

"It appears inconsistent," said Kohl, "for Verizon to argue on the one hand that the joint marketing arrangements and bundling wireless services with cable offerings increases customer choice, while on the other hand the company is tying voice and DSL services."

"As we have explained, our decision to adjust the way we offer DSL service after May 6 more accurately represents the broadband customer base at Verizon," said Verizon. "The vast majority of our DSL customers enjoy it as part of a bundle with reliable home voice and TV service. By bundling, customers receive a better overall experience and value by having multiple services as part of a package.

"By discontinuing a standalone DSL offer after May 6, we are meeting the needs of our customers and can control our cost structure more effectively, enabling us to continue providing competitively priced services to existing and new customers.

"New DSL customers going forward will be getting the best value we can offer for the service even with voice added. There will be no changes to service for all existing DSL customers. We also proactively provided existing customers a 30-day advance notice to make speed upgrades or downgrades to their existing service if they choose to do so."

The company had no response to the DirecTV letter at press time.

Verizon has proposed paying approximately $3.9 billion to Comcast, Time Warner Cable, Bright House and Cox for advanced wireless spectrum the cable operators say they did not have a business case for building out into a competitive broadband wireless service.

September