What is Verizon Wireless cooking up with its cable partners?

Phil Goldstein

One key part of Verizon Wireless' (NYSE:VZ) $3.9 billion purchase of 20 MHz of nationwide AWS spectrum from a group of cable companies (Comcast, Time Warner Cable, Bright House Networks and Cox Communications) last year was a joint technology venture with the companies, formally known as the "Joint Operating Entity." The joint venture was designed to develop technology to better integrate wireline and wireless products and services. However, it's still unclear what the joint venture is actually working on.

Here's what I know so far: The joint venture is being led by Tony Heyman, Verizon's president for converged solutions. He's also been spearheading the marketing partnerships between the carrier and the cable companies, in which they have been reselling each other's services in stores across the country.

But what exactly is the joint technology venture working on? None of the companies will really say at this point. Some work on "converged solutions" is being done at Verizon's LTE Innovation Center in Waltham, Mass., but the companies aren't providing details.

The fullest explanation on record so far comes from Verizon Wireless CEO Dan Mead, who said in May that "we are at the very early stages of the value creation. But what you're going to see is a tremendous pipeline in terms of the value experience," according to a transcript of his remarks. Mead talked vaguely about some kind of converged video solution because "video expansion in our business is going to be very important in the future."

Mead said Verizon's cable partners would likely introduce products as a result of the technology joint venture one at a time and not all at once. It seems like Comcast is the lead partner in the cable venture. And when might an actual product come to market? Mead said "we look at the fourth quarter as a very important time for us in the marketplace."

According to a September 2012 New York Times article on the partnership: "Comcast's ideas include mobile phones that could ring on a landline when customers are at home, text messages that appear on television screens (though in focus groups teenagers opposed this feature), a single voice mail box for both home and mobile phone numbers, and movies and photos shot on a smartphone that could easily appear on a television screen."

I hope whatever the companies have been working on since then is a bit more exciting than that. This technology joint venture is supposed to bring together Verizon's strength in LTE networking with the cable companies' programming and network capabilities. Don't get your hopes up though for anything revolutionary.

SNL Kagan analyst Ian Olgeirson said that initial products "may tend to be a little bit more of a rebranding of what TV Everywhere might look like for an app that is optimized" for Verizon Wireless devices. He said there could be more integration between the companies on the user interface of such a product. Count me unimpressed.

What about the concept of streaming your real-time Comcast, Time Warner Cable, Cox or Bright House TV content over Verizon's LTE network (perhaps even via LTE Broadcast)? This could even leverage a "toll-free" data plan scheme, where the cost of the transmission didn't count toward your Share Everything data bucket.

Maybe, maybe not. "You'll see all service providers tread pretty lightly when it comes to preferential treatment, or 'don't count against the bucket,'" Olgeirson said. "I'm not sure that the benefit for the operators in that scenario outweighs the blowback they might encounter."

My colleague Steve Donohue of FierceCable discovered in November that Verizon filed a patent application for targeting ads to viewers based on information collected from infrared cameras and microphones that would be able to detect conversations, people, objects and even animals that are near a TV. However, it's unclear if that's related to the joint technology venture's work.

So what could the companies actually be working on? Your guess could be as good as mine at this point. I just hope it's something innovative and not a tired retread of existing services. Hopefully we'll find out sooner rather than later.--Phil