Regulators Aim to Restrict Verizon/Cable Spectrum Sale

Welcome to the broadband and cable news roundup, T.G.I.F. edition.

Verizon Wireless and cable operators Comcast Corp. (Nasdaq: CMCSA, CMCSK), Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. and Bright House Networks are in talks with regulators about restrictions that could follow the sale of cable Advanced Wireless Services (AWS) spectrum to Verizon. According to The New York Post, one restriction would prevent Verizon Wireless and the cable companies from bundling services "in markets where both Verizon is the largest cellular carrier and where any of the Comcast-led cable group are the dominant cable TV providers." Reuters reports that another condition being considered would keep Verizon Wireless and the cable companies from bundling services in FiOS markets.

If any of those conditions come to pass, it could prevent Verizon Wireless and the cable companies from teaming up to offer wireless service bundles in some major markets in the Northeast, including New York City. Sprint Corp. (NYSE: S) has urged regulators to block Verizon and the cable companies from co-marketing services in areas where one of the cable operators competes with Verizon Communications Inc. (NYSE: VZ)'s wired network. (See Sprint Wants to Snip the Verizon/Cable Bundle.)

Boston Mayor Thomas Menino has again come out against the sale of cable company spectrum to Verizon, this time via a letter to Attorney General Eric Holder arguing that the proposed deal and commercial bundling arrangements aren't in the public interest. "Put simply, the City is concerned that these transactions are designed to ensure that Verizon and Comcast collaborate and never compete in Boston," Menino wrote.

"After a Sunday blip, Netflix streaming is back to normal levels," Procera Networks blogged on Thursday after reporting earlier this week that Netflix Inc. (Nasdaq: NFLX)'s U.S. traffic was down 25 percent on July 29 as consumers flocked to NBCUniversal LLC 's broadband coverage of the summer Olympics. (See Olympics Sink Netflix Streams .)

The Consumer Electronics Association (CEA) has thrown a monkey wrench into a cable-led proposal to the Federal Communications Commission (FCC) to use low-cost Digital Terminal Adapter (DTA) devices and licensed security so IP-connected video devices, like the Boxee box, can access encrypted programming in cable's basic tier, reports Multichannel News. The CEA, which has been a fan of a potential CableCARD successor called AllVid, spelled out why the proposal, pitched by the nation's top six incumbent cable operators, is "fundamentally flawed." (See Cable Tries to Break Video Encryption Stalemate and Comcast & Boxee Connect on Video Security .)

— Jeff Baumgartner, Site Editor, Light Reading Cable