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FCC Demands More Info on Verizon, Cable Marketing Deal

Fri, 03/09/2012 - 7:24am
Maisie Ramsay

Verizon Wireless and four cable companies are being asked to provide more information to the FCC about a marketing and cross-selling agreement they signed at the same time they forged a multi-billion dollar spectrum deal.

Verizon and its cable partners have insisted the transactions are separate and should not be combined in the FCC's review of the airwaves sale.

The FCC on Thursday sent requests for details about the side deal to Verizon, Time Warner Cable, Bright House Networks, Comcast and Cox Communications.

The agency wants to know whether the marketing arrangement was connected to the spectrum sale.

Each of the companies were asked whether they "conditioned or otherwise connected its decision to enter into any of the agreements on the execution or consummation of the spectrum license purchase agreements, any of the other agreements, or any other commercial agreement or arrangement."

A Verizon spokesman said it would "respond completely and rapidly" to the FCC's questions.

The agency also made a number of other requests, including information about the cable operators' attempts to launch their own wireless network and Verizon's spectrum shortage.

The information request came out the same day that a Comcast executive told Politico Pro that the deal with Verizon "is an integrated transaction. There was never any discussion about selling the spectrum without having the commercial agreements."

The FCC's information request appears to be unrelated to the publication of the story on March 8. A Verizon ex parte document mentions a March 7 discussion with the agency about "forthcoming interrogatories and document requests," indicating the FCC decided it needed additional data about the deal before the Comcast statements were made public.

Competitors to Verizon and the four cable operators have repeatedly questioned the separateness of the spectrum sale and the marketing agreements. DirecTV, Sprint, C Spire Wireless, T-Mobile USA and a number of other groups say the transactions are related and should be reviewed together and have asked the FCC to take a closer look at the arrangement.

"The assignment of CMRS spectrum represented by the applications appears to be only one small part of what could be a significant realignment of the competitive landscape in these industries," the companies said in a January letter to the FCC.

Verizon and the cable companies have held back key details about the marketing deal from the public record, claiming they are competitively sensitive.

Verizon announced late last year that it was paying $3.6 billion for 122 AWS licenses from Comcast, Time Warner Cable and Bright House Networks and inked a separate deal to buy another 30 AWS licenses from Cox Communications for $315 million. Combined, the spectrum covers about 94 percent of the U.S. population.

The airwaves will be used to add capacity to Verizon's LTE network. The operator said it could run into a spectrum shortage as early as next year in some markets and expects to run into more severe capacity problems in 2015 if it does not get additional airwaves.

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