FCC Wants More Data About Verizon Agreements With Comcast

Regulators will consider marketing agreements that link the biggest U.S. mobile carrier Verizon Wireless and cable operators led by Comcast Corp. (CMCSA) as officials judge the companies’ proposed $3.6 billion airwaves deal.

Parts of the marketing agreements are “inseparable” from Verizon’s proposal announced in December to buy unused airwaves from the cable companies, Neil Grace, a spokesman for the Federal Communications Commission, said in an e-mail.

The agency posted on its website queries to Verizon, largest U.S. cable company Comcast, and No. 2 operator Time Warner Cable Inc. (TWC) The FCC has no deadline to approve or deny the airwaves sale. It sets an informal 180-day target for deciding.

The marketing deals were announced in December along with the airwaves transfer. The accords make allies of cable companies pushing into the phone business and Verizon Wireless, whose corporate parent is gaining market share in the video business.

“The commission is following an aggressive course in asking for more information for a deal that could create a new communications cartel in this country,” Gigi Sohn, president of Public Knowledge, said in an e-mailed statement.

The Washington-based policy group joined Sprint Nextel Corp. (S) and T-Mobile USA Inc. on March 6 in seeking more information about the marketing deals.

Smartphone Demand

Verizon says the spectrum purchase will bring it airwaves needed to meet demand that is soaring as consumers turn increasingly to smartphones and data-hungry tablet computers such as Apple Inc.’s iPad.

“We will continue to respond completely and rapidly to the questions about both the spectrum transfer and the separate cross-marketing agreements,” Ed McFadden, a spokesman for the company, said in an e-mail. “We believe getting previously unused spectrum into the hands of consumers is strongly in the public interest.”

The commercial agreements “provide substantial consumer benefits without any reduction in competition,” Sena Fitzmaurice, a spokeswoman for Comcast, said in an e-mail.

The Justice Department separately is looking into the marketing deals.

Verizon Wireless, based in Basking Ridge, New Jersey, is 55 percent owned by Verizon Communications, with the remainder held by Newbury, United Kingdom-based Vodafone Group Plc. (VOD)

Limited Review Sought

The FCC’s review should be confined to analysis of the airwaves sale, Verizon’s top Washington official, Tom Tauke, an executive vice president, said in a Feb. 16 meeting with FCC officials.

Since the airwaves sale announcement, Comcast has begun cooperative marketing with Verizon Wireless in Seattle, San Francisco and Portland, Oregon. Some new customers in those areas can get a $300 gift card when they enroll with both companies.

The cable companies, through their joint venture SpectrumCo LLC, are selling airwaves in 120 markets that they purchased in 2006 and never developed. Closely held Bright House Networks LLC, which calls itself the sixth-largest U.S. cable operator, is a member of the three-company selling group.

Verizon Wireless in December reached a similar deal with Cox Communications Inc. FCC requests for information today also went to Cox and Bright House.

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

To contact the editor responsible for this story: Bernard Kohn at bkohn2@bloomberg.net

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