Skip Navigation

Close and don't show again.

Your browser is out of date.

You may not get the full experience here on National Journal.

Please upgrade your browser to any of the following supported browsers:

Reveal Navigation

Despite T-Mobile Deal, Verizon Still Faces Battle Over Marketing Agreements with... Despite T-Mobile Deal, Verizon Still Faces Battle Over Marketing ... Despite T-Mobile Deal, Verizon Still Faces Battle Over Marketing Agree... Despite T-Mobile Deal, Ve...

share
This ad will end in seconds
Close X

Not a member? Learn More »

Forget Your Password?

Don't have an account? Register »

Reveal Navigation

 

Tech

Despite T-Mobile Deal, Verizon Still Faces Battle Over Marketing Agreements with Cable Firms

June 26, 2012

After cutting a deal with T-Mobile USA, Verizon appears to have helped smooth the way for federal approval of its bid to buy spectrum from a group of cable firms. But it has done little to quell concern over related marketing agreements between the wireless provider and the cable operators.

Verizon announced Monday that it had reached an agreement with T-Mobile to swap some of the advanced wireless services spectrum it hopes to obtain as part of Verizon's agreement with a group a of cable companies. T-Mobile has been among the most vocal opponents of the spectrum deal between Verizon and the cable firms. On Monday, T-Mobile said it was withdrawing its opposition to the spectrum deal as a result of its agreement with Verizon.

Verizon announced late last year that it planned to buy spectrum from a joint venture made up of Comcast, Time Warner Cable and Bright House Networks and from Cox Communications as part of a separate deal. In addition, Verizon said it would enter into cross-marketing and technology research agreements with the cable firms.

Analysts say Verizon's deft move to peel off T-Mobile from the band of critics of its deal with the cable firms will help clear the way for Federal Communications Commission approval of the spectrum transaction.

"Our sense is the deal would address or largely address the FCC's spectrum concentration concerns resulting from Verizon's planned purchase of cable AWS (advanced wireless service) spectrum," the research firm Stifel Nicolaus said in a research note released late Monday.

Even critics acknowledged that Verizon's deal with T-Mobile, which is contingent on approval of its spectrum deal with the cable firms, has removed a major hurdle. "I definitely think that Verizon has played this very well," Public Knowledge Senior Vice President Harold Feld said Tuesday.

His group and other critics have voiced concern about the impact on wireless competition of allowing the nation's biggest wireless provider, Verizon, to amass so much valuable spectrum. "The fact is that Verizon could have tried to tough it out, instead they decided to negotiate on their own terms."

But Feld and others note that the move does little to address concerns over the related marketing agreements with the cable firms, which are being closely examined by the Justice Department.

The spectrum agreement with T-Mobile "removes a huge hurdle but it doesn't clear the plate," Jeffrey Silva, a telecom analyst at Medley Global Advisors, said in an interview. "It doesn't clear all the concerns that the FCC and the Justice Department" have with the deals.

The Communications Workers of America, which represents thousands of Verizon wireline workers, has been among the loudest critics of the marketing agreements. CWA has argued that Verizon and the cable firms' agreement to sell each other's services amounts to a truce. They note that in many markets, Verizon's FiOS and DSL wireline services are the only alternative to wired phone, Internet and video service offered by cable firms.

"I think the issues on the marketing agreements still need to be addressed," CWA Research Economist Debbie Goldman told Tech Daily Dose. She said her group met with the Justice Department Tuesday to formally outline what they see as the anti-competitive aspects of the marketing agreements.

CWA is pressing regulators to attach conditions to approval of the deal that would ensure that Verizon continues to compete with the cable firms for wired phone, Internet and video customers. Among the conditions CWA is seeking would bar Verizon Wireless and the cable companies from selling each other's services in areas where Verizon currently offers wired services.

Silva said he suspects Justice is taking CWA's concerns seriously particularly given the importance of organized labor to President Obama's re-election campaign. "My sense is their concerns about this deal with respect to the cross marketing deals is going to carry some weight," Silva added.

Get us in your feed.