Verizon, Comcast Send Marketing Deals to FCC in Airwaves Review

Verizon Wireless and cable companies led by Comcast Corp. (CMCSA) filed agreements with the U.S. government to sell each others’ services, and said the deals shouldn’t be part of a regulatory review of their $3.6 billion airwaves sale.

The marketing arrangements announced alongside the airwaves sale last month don’t require approval by the Federal Communications Commission, the companies said in a filing posted today on the FCC website. Under the proposed spectrum sale, largest U.S. wireless company Verizon would buy airwaves from a group made up of leading U.S. cable provider Comcast, Time Warner Cable Inc. (TWC) and closely held Bright House Networks LLC.

The deal would let Verizon add airwaves as customers use smartphones such as Apple Inc.’s iPhone to watch video and browse the Web. AT&T Inc. (T), the second-largest U.S. wireless operator, dropped a bid last month to increase its airwaves holdings by buying rival T-Mobile USA Inc.

The proposed sale to Verizon “appears to be only one small part of what could be a significant realignment of the competitive landscape,” companies including mobile carriers T- Mobile USA and Sprint Nextel Corp. (S), and satellite-television provider DirecTV said yesterday in a letter to FCC Chairman Julius Genachowski.

The competitors asked Genachowski to require Basking Ridge, New Jersey-based Verizon Wireless and the cable companies to divulge the marketing agreements, according to the letter, which was also signed by Washington-based policy groups Public Knowledge and Media Access Project.

FCC Jurisdiction

The deal would let the cable companies offer wireless services to customers without investing in their own network or acquiring a wireless company, Neil Smit, an executive vice president at Philadelphia-based Comcast, said in an interview.

The companies submitted copies of the marketing agreements to the FCC under confidentiality protections to avoid delay in reviewing the airwaves sale, and to fulfill an agency request, according to the filing posted today.

The companies’ filing “will eliminate a controversy that surely would have taken place had they not done so,” Harold Feld, legal director for Public Knowledge, said in an e-mailed statement.

“No one should accept the companies’ claim that the arrangements are outside of the FCC’s jurisdiction,” Feld said. “They clearly are” within the agency’s purview, he said.

Neil Grace, an FCC spokesman, didn’t immediately provide a comment.

The FCC will “undertake a thorough, fair and fact-based review of the proposed transaction,” Grace said last month.

The FCC and Justice Department are likely to approve the deal, though they may require the sale of assets in some markets, said Jeff Silva, senior policy director for telecommunications, media and technology at Medley Global Advisors LLC in Washington.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Michael Shepard at mshepard7@bloomberg.net

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