Verizon, SpectrumCo Joint Marketing Agreements Filed at FCC
Verizon Wireless and the cable companies behind SpectrumCo on Thursday voluntarily offered more details on their proposed deal, expected to be the subject of an intensive examination by the FCC (CD Jan 19 p1). SpectrumCo agreed in December to sell 133 AWS licenses to Verizon for $3.6 billion. Verizon is also buying several dozen AWS licenses from Cox. All the companies also announced various commercial agreements between the cable operators and Verizon Wireless, under which they would sell each others’ products. That part of the agreement has led to additional controversy.
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The companies agreed to submit to the FCC copies of their joint marketing agreements to resell each other’s services, based on assurances from agency staff that the documents would be treated as “highly confidential” material under a commission protective order. They also argued that the FCC’s consideration of the spectrum sale should not be tied to the other commercial arrangements between the companies. SpectrumCo is a joint venture of Comcast, Time Warner Cable and Bright House Networks.
"Those Commercial Agreements have no bearing on whether the spectrum sale is in the public interest, do not require Commission approval, and, for several reasons, do not need to be part of the formal record in this proceeding,” the letter said (http://xrl.us/bmo9uv). The spectrum transfer and commercial agreements “are not contingent upon each other,” the letter said. “Nothing in the Commercial Agreements requires approval of the spectrum license transaction, or vice versa.”
The commercial agreements merely offer the various parties “the ability to act as agents selling one another’s services, and provide the members of SpectrumCo the option of acting as resellers in the future,” the letter said. “They also establish a technology joint venture to develop innovative technology and intellectual property that will integrate wired video, voice, and high-speed Internet with wireless technologies. Sales agency agreements are common in the industry, as are reseller agreements and technology development agreements."
Prior to release of the document, a consortium of companies and associations lining up to raise questions about the deal sent the FCC a letter asking that the commission require Verizon and Comcast to file additional details about their proposed new business arrangements. C-Spire, DirecTV, Ntelos, Sprint Nextel, T-Mobile, Public Knowledge, the Consumer Federation of America, Media Access Project and New America Foundation signed the letter.
"This voluntary filing will eliminate a controversy that surely would have taken place had they not done so,” said Public Knowledge Legal Director Harold Feld, whose group has expressed concerns about the AWS deal. “At the same time, no one should accept the companies’ claim that the arrangement are outside of the FCC’s jurisdiction. They clearly are. We expect the commission to evaluate these arrangements in the context of the spectrum deal to determine how the entire transaction will affect competition and the public interest."
"These agreements might be convenient for business, but they will most certainly come with a high cost to consumers. Without real competition for cable or mobile phone services, there’s no pressure to lower prices or innovate,” said Free Press Policy Director Matt Wood. “Even as the FCC begins its process for reviewing these deals, Verizon and the cable companies have already begun to resell each other’s services in select cities under joint marketing agreements. The companies are circumventing the review process, and they should stop doing so until the public has had time to comment on the arrangements and the FCC makes its decision."
Meanwhile, the Wireless Bureau released the schedule for making various filings covering the SpectrumCo deal and a separate sale of 30 AWS licenses from Cox to Verizon (http://xrl.us/bmo99b). “For administrative convenience given the commonality of issues, particularly the aggregation of spectrum and the public interest arguments raised by the Applicants, we consolidate the Applications for purposes of our review and consideration of those issues,” the order said. Petitions to deny are due Feb. 21, oppositions March 2 and replies March 12.
So far, four attorneys with Telecommunications Law Professionals have signed the acknowledgments of confidentiality required to gain access to the confidential and highly confidential material submitted in the proceeding, a filing with the commission shows. The TLP lawyers are representing MetroPCS and the Rural Cellular Association in the proceeding, said Jessica DeSimone, one of the attorneys who signed the acknowledgments.