Bundling wireless, Internet and cable

8:02 AM, Aug 17, 2012   |    comments
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By Mike Snider and Roger Yu, USA TODAY

The good news: Consumers could soon have more options for bundling their wireless, Internet and cable TV services.

The bad news: If you were waiting for more competition - or lower prices - for broadband or wireless service, you could be waiting in vain.

That was the reaction from industry observers and consumer advocates in the wake of federal regulators' approval Thursday of a deal between Verizon and cable operators Bright House, Comcast, Cox and Time Warner. The cable companies will be able to include Verizon Wireless' plans in bundling promotions and Verizon will pay the cable companies $3.6 billion for wireless spectrum they currently hold.

The companies also have entered into a joint venture to develop new wireless and wired technologies that will make their devices work together more seamlessly. For example, your wireless phone voice mail could be accessed from your TV. "This is going to provide more choices and hopefully more innovative products," says Comcast spokeswoman D'Arcy Rudnay.

The Justice Department, which reviewed anti-competition concerns, approved the deal after the companies agreed to submit regular reports and undergo a review after four years.

Those stipulations, along with Verizon's plan to build out the new spectrum quickly, should result in approval by the Federal Communications Commission, says Chairman Julius Genachowski.

Other changes affecting consumers:
•If you live in an area not served by Verizon's FiOS (more than 80% of the U.S.), Verizon will sell the area cable company's Internet and bundled packages. At some Verizon stores, Comcast sells a discounted "triple play" package of Internet, phone and cable service for Verizon customers.

•Verizon stores in FiOS markets will not sell the cable companies' products. But cable companies can sell Verizon Wireless' service.

•In areas where Verizon and a cable company are cross-selling, customers may eventually receive one consolidated bill.

•Cable companies also have the option, though not likely anytime soon, of reselling Verizon Wireless' service under their own branding.

Still, regulators' approval is acceptance that little future competition is expected between cable and telephone companies, says Parul Desai, policy counsel for Consumers Union.

Verizon still has no incentive to expand its FiOS service, leaving a large portion of the U.S. with only a choice between DSL and cable broadband. "We now live in a world where we have regional cable monopolies and essential a duopoly in wireless (in Verizon and AT&T)," says Public Knowledge co-founder Gigi Sohn. "The government has to ask itself, 'How are we going to respond?'"

Roger Entner, a telecom analyst at Recon Analytics, says Verizon had largely stopped investing in new markets for FiOS because they weren't profitable.

"Verizon didn't stop building because of this," he says. "(This deal) is somewhere between neutral and good for consumers. ... Customers can have a one-stop shop where their communication needs are being served."

USA TODAY

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