Verizon-AOL Hears It From Consolidation Critics

The Federal Communications Commission won't have to vet Verizon's mobile video play -- its proposal to buy AOL for $4.4 billion -- but consolidation critics are already kicking the tires and saying “ouch!”

An FCC spokesperson confirmed no license transfers are involved in the deal; thet would have triggered an FCC review, though the merger will still need to pass muster with antitrust regulators, either the Federal Trade Commission or, more likely, the Department of Justice, which conducts Hart Scott Rodino antitrust reviews of all deals valued at more than $75 million.

"In light of Verizon's efforts to collect data on customers with its 'Supercookie' for advertising, this raises some significant privacy and competition concerns," said Harold Feld, senior vice president at policy advocate Public Knowledge.

In addition to being a content creator, AOL is a major player in the online advertising market, Feld noted,adding "Until the FCC resolves the question of how to apply the telecommunications customer privacy rules to broadband, there is a real danger that Verizon will share customer data collected from its mobile data and FIOS subscribers."

Free Press was quick to argue Verizon could better spend the money elsewhere.

"Verizon's acquisition of AOL is yet another example of how Wall Street's short-term mindset shortchanges competition and investment in American infrastructure," Free Press research director Derek Turner said. "For the price it's paying for AOL, Verizon could deploy its FiOS broadband service across the rest of its service area, bringing much needed services and competition to communities like Baltimore, Boston and Buffalo [N.Y.]. Instead, the company is spending a fortune to step outside of its core competency into the content production market, where it has already shown a willingness to censor news coverage. It's hard to see how this transaction is good for anyone but a few brokers and lawyers."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.