DOJ intercedes in cable/telco dispute


The citizens residing in rural portions of eastern Pennsylvania may be the winners, even as Citizens Communications suffers a loss at the hands of the Department of Justice. Citizens, a telco provider, has been barred from enforcing an inherited agreement which prevented cable companies from offering voice services. According to InfoWorld, the issue came to a head when Citizen acquired Commonwealth Telephone Enterprises.

Commonwealth had settlements in place with Blue Ridge Communications and Service Electric Cablevision which prevented the latter two companies from adding voice service to their cable television offerings. The DOJ found this to be anticompetitive, and did not allow the settlements to continue on under the new ownership regime. According to the DOJ, state regulations may be in place, but that does not make a situation immune from federal antitrust law.

SmartMedia observation: It is common for members of the business community to sing of the virtues of competition, but at the same time, nobody moves faster or stronger to thwart competition than members of the business community. Telephone companies are doing everything in their power to enter the MVPD business, so it should come as no surprise to them that cable companies will do everything they can to snag away as much traditional telephone business from telcos as they can. We would hope as a general rule that regulatory agencies keep competition alive and well, and that they remember this lesson when considering the monopolistic merger proposal of XM and Sirius.