Verizon Wireless and the four cable operators it is buying spectrum from have presented the FCC with a nuanced explanation of a marketing and cross-selling arrangement that was penned at the same time the companies agreed on a $3.9 billion sale of AWS spectrum.
The marketing deal between Verizon and Comcast, Time Warner Cable, Bright House Networks and Cox Communications has come under scrutiny for its apparent connection to the airwaves transaction and its possible competitive impact on the cable market.
The FCC asked the companies earlier this month to disclose more information on the side deals after their competitors argued the spectrum sale “appears to be only one small part of what could be a significant realignment of the competitive landscape.”
Verizon Wireless has said that the spectrum purchase and the other agreements are separate, a stance it maintained in documents posted Friday afternoon to the FCC’s online docket.
“The consummation of the transaction contemplated by the license purchase agreements (i.e., sale of the spectrum to Verizon Wireless) is not contingent on the other agreements, and similarly the transactions contemplated by the other agreements (i.e., the parties acting as agents for sale of services, the operation of the technology joint venture, the MSO parties acting as resellers of Verizon Wireless services, if they so elect) are not contingent on the license purchase agreements,” Verizon said.
Comcast painted a somewhat different picture than Verizon. It holds the most spectrum of the group, which goes under the name SpectrumCo, and says it has managed SpectrumCo’s day-to-day operations since it was formed in 2006.
It said the AWS spectrum sale wouldn’t have happened without the side deals, which provide the cable operators with a long-sought means of entering the wireless market.
“Neither Comcast nor SpectrumCo would have entered into the spectrum license purchase agreement had Comcast [and the other SpectrumCo owners] and Verizon Wireless not come to terms on the commercial agreements,” it told the FCC, adding that it would not have given up its spectrum “without having in hand alternative ways of achieving its wireless goals.”
However, Comcast echoed Verizon’s statement that the license agreement and the marketing agreements are not contingent on each other.
“As a legal matter, the spectrum license purchase agreement and the commercial agreements are separate from and not contingent on each other,” Comcast said.
Verizon and the cable operators agreed late last year to cross-sell each other’s services and have formed a joint venture, and the cable operators were given the option to resell Verizon’s wireless service under their own brand, similar to their former MVNO deals with Sprint.