Verizon Wireless (NYSE: VZ) and a group of leading cable operators have agreed to dial back their joint venture plans in order to get regulatory approval for a $3.9 billion spectrum sale, according to a Bloomberg BusinessWeek report.
Verizon Wireless is trying to buy unused spectrum from the cablecos Comcast (Nasdaq: CMCSA), Time Warner Cable (NYSE: TWC) and Bright House Networks--joined together as SpectrumCo--and Cox Communications. Adjacent to that transaction, the groups also wanted to get together in the JV where Verizon Wireless would sell cable service and the cablecos would promote the wireless operator. That second part got a little sticky when opponents raised concerns that it would curtail, if not kill, the growth of Verizon FiOS as a cable competitor.
Now, according to sources speaking to Bloomberg BusinessWeek, the parties have agreed to dial things back to preserve competition, including "restrictions on the duration and geographic reach of cross-marketing accords," the sources told the publication.
The reported agreement would bar cross-marketing in areas where FiOS is already in place, according to three sources, while one source said it would even extend to where Verizon plans to put the service--although Verizon's FiOS expansion plans have been curtailed since 2009. Also as part of the deal the companies would have to go back and ask for permission "after a period of about four or five years … if they wish to continue to sell each other's products," a couple sources told the publication.
The FCC and Department of Justice, both of which are looking at the deals, declined to comment, the publication said.
Verizon spokesman Richard Young reiterated the carrier's position that it was in the midst of "constructive conversations at both the FCC and Department of Justice and anticipate(s) approval later this summer." Comcast spokesman John Demming didn't respond immediately for comment, the publication said.
The FCC and DoJ must both approve the deal, which has come under fire from a number of critics including legislators and Verizon's key union, the Communications Workers of America (CWA).
For more:
- see this Bloomberg story
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