A.G. Schneiderman Announces Legal Action To Protect Competition For Broadband And Video Services In New York

NYS Attorney General And U.S. Department Of Justice Require Verizon And Cable Operators To Make Pro-Competitive Changes

Antitrust Settlement Prohibits Verizon Wireless From Selling Time Warner Cable Services Where Verizon Sells Or Will Sell FiOS

 

NEW YORK - Attorney General Eric T. Schneiderman today announced that New York and the U.S. Department of Justice have reached a settlement with Verizon, Time Warner Cable, and three other cable operators, requiring improvements to protect competition. Today’s legal actions bring changes to a set of commercial agreements reached among the companies in December 2011. Among other changes to protect competition for consumers, the settlement prohibits Verizon Wireless from selling cable company services in areas in which Verizon’s competing FiOS product is or will be offered.

“New Yorkers deserve a fair, competitive marketplace when they are looking for a broadband or cable provider. These changes help ensure that our leading service providers continue to compete, rather than collude,” said Attorney General Schneiderman. “The revised agreements reinforce incentives to continue to market and build broadband, something that is desperately needed to reduce the digital divide in New York State.”

The Antitrust Division of the U.S. Department of Justice and the New York Attorney General filed a civil lawsuit today in U.S. District Court in Washington, DC, to prevent the commercial agreements from going forward as originally drafted.  At the same time, the two offices filed a proposed settlement that, if approved by the court, would resolve the antitrust concerns raised by New York and the United States.

A particular concern for New York consumers was reduced competition in areas where both Verizon and Time Warner Cable offer broadband and video services. In many parts of New York, FiOS is an attractive alternative to cable, including services offered by Time Warner Cable, one of the parties to the agreements. In their original form, the agreements would have made Verizon Wireless a seller of Time Warner Cable services, even in areas where FiOS is available. This and other aspects of the deal raised concerns that Verizon and Time Warner Cable would cooperate rather than compete, resulting in higher prices and less choice for New York consumers. The changes also apply to Comcast, which has a limited number of customers in New York. 

The companies’ original agreements also included a joint venture to develop new technologies for wireless and wireline services. The proposed settlement alters the joint venture, including a limitation of its duration to five years, to ensure that the agreement does not reduce the parties’ future incentives to compete

The case is being handled for New York by Special Assistant Attorney General Mary Ellen Burns, Acting Deputy Bureau Chief Geralyn Trujillo, and Chief Economist Jonathan Arnold, with oversight by Antitrust Bureau Chief Scott Hemphill and Executive Deputy Attorney General for Economic Justice Karla G. Sanchez. 

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