Sparks Start to Fly in VZ Wireless-MSO Deal

The MSOs involved in a multifaceted deal with Verizon Wireless have grudgingly agreed to provide the Federal Communications Commission (FCC) with more details about the service-bundling element of the agreement, but insist that the information should have no bearing on the agency's review of the sale of spectrum to the mobile carrier.

But don't get too excited about this disclosure; it will be provided under separate cover for the FCC's eyes only and designated as "highly confidential."

That more limited reveal is sure to chap the hide of some of their respective competitors. A group led by Sprint Corp. (NYSE: S), DirecTV Group Inc. (NYSE: DTV) and T-Mobile US Inc. wants to peek under the covers and has urged the FCC to seek and disclose those details as the Commission gets ready to review Verizon Wireless's proposed purchase of Advanced Wireless Services (AWS) spectrum from Comcast Corp. (Nasdaq: CMCSA, CMCSK), Bright House Networks , Time Warner Cable Inc. (NYSE: TWC) and Cox Communications Inc. for almost $4 billion. (See Comcast: We Had AWS Plans, Honest!, VZ Wireless Nabs Cox's AWS Spectrum for $315M and MSOs Sell AWS Spectrum to Verizon for $3.6B .)

The Sprint-DirecTV side claims they'll need that information as they get ready to file comments for the FCC's review of the spectrum transaction. According to the pleading cycle established by the FCC on Thursday, petitions to deny are due Feb. 21, with oppositions due March 2.

But the Verizon Wireless-cable side is reluctant to show the finer points of their bundling deals out in the open. In a filing to the FCC on Wednesday, they agreed to provide the FCC, on a classified basis, details of the co-marketing deal, which lets the MSOs and Verizon Wireless bundle and sell each other's services. The MSOs also have an option to sell Verizon Wireless services under their own brands later on.

But they agreed to give the FCC a closer look only to "avoid undue delay" in the agency's review of the spectrum deal, holding that the service marketing component isn't really relevant to it.

"[T]he proposed spectrum license sale and the Commercial Agreements are not contingent upon each other. Nothing in the Commercial Agreements requires approval of the spectrum license transaction, or vice versa," the filing stated.

Verizon Wireless and Comcast have already turned that opinion into action. On Tuesday, Comcast and Verizon Wirless began to promote and bundle each other's services in two markets: Seattle and Portland, Ore. (See Comcast Subs Get a Taste of Verizon.)

— Jeff Baumgartner, Site Editor, Light Reading Cable