Verizon Wireless (NYSE:VZ) and its newly minted cable partners have argued--over the objections of Sprint Nextel (NYSE:S), T-Mobile USA and others--that the details of their marketing agreements should not be included in the FCC review of the spectrum transfer portion of their teaming.
In a pair of dueling FCC filings made public this week, Verizon, Comcast, Time Warner Cable, Cox Communications and Bright House Networks argued that their commercial agreements fall outside of the FCC's purview and are not relevant to the review of their spectrum exchanges. Further, they argue the agreements contain sensitive competitive information that should not be made public as part of the proceeding. On the other hand, Sprint, T-Mobile, C Spire Wireless, DirecTV and several public interest groups wrote in their FCC filing that the commercial details are necessary to understanding whether the deals harm the public interest.
In December Verizon agreed to pay $3.6 billion for the nationwide AWS spectrum licenses held by SpectrumCo, a joint venture of cable companies Comcast, Time Warner Cable and Bright House Networks. Separately, Verizon said it will buy Cox Communication's 20 MHz of AWS spectrum covering 28 million POPs for $315 million. All of the deals include the option of Verizon reselling cable services and cable companies reselling Verizon service. The FCC has consolidated the purchases into one review; the Department of Justice also needs to approve the deals.
Verizon and the cable companies submitted the details of the commercial agreements under a protective order granting them confidentiality, which the companies said is necessary. "Disclosure of the terms and conditions of the Commercial Agreements would significantly harm the parties to those agreements by providing competitors and potential competitors with detailed information about, among other things, pricing and compensation matters, marketing strategies and rollout plans, and other details about the way in which the parties to the Commercial Agreements will market services," the companies wrote.
However, the other side argued that the commercial details are essential to assessing the overall plan, which also includes the formation of a joint venture among Verizon and the cable companies to better integrate their wireline and wireless products and services.
"Without the ability to review the larger transaction in its entirety, it is impossible to assess whether there will be public interest harms associated with this proposed transfer," the companies wrote in their filing, which was also signed by Public Knowledge, the Media Access Project, the Consumer Federation of America and other interest groups. The spectrum transfer "appears to be only one small part of what could be a significant realignment of the competitive landscape in these industries."
Verizon and Comcast began marketing each other's services in Seattle and Portland, Ore., this week, and the two expect to expand that to more markets this year, but Verizon has not said when or how it will work with the other cable companies.
- see this Verizon FCC filing (PDF)
- see this separate FCC filing (PDF)
- see this Reuters article
- see this Blommberg article
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