Verizon Wireless and U.S. cable companies are facing resistance from U.S. regulators over deals that have raised competitive concerns.
Three sources with knowledge of the negotiations told Reuters the nation's biggest wireless provider may need to agree to tough conditions to obtain approval to acquire spectrum from cable companies and market each others' products.
Verizon Wireless' $3.9 billion deals to acquire spectrum from the cable companies don't appear to have raised the same red flags in Washington, D.C., as other pacts between the companies, including arrangements to market each other's services. Those co-marketing agreements already have taken effect in several cities.
Some critics of the agreements have griped that Verizon Wireless' parent, Verizon Communications, will no longer build out its fiber-optic FiOS network (currently passing roughly 17 million premises) due to the cross-marketing agreements with cable operators, including Comcast and Time Warner Cable. Opponents also have claimed the deals undermine competition by allowing for collusion between Verizon Wireless and the nation's leading cable companies.
Sources told Reuters the path that the discussions are on would lead to a consent decree barring the cross marketing agreement where Verizon markets FiOS. Verizon offers Internet, voice and television services under its growing FiOS brand, and cable companies have been losing TV customers to Verizon (4.5 million video connections at the end of the second quarter).
Under the talks, cross marketing in the remainder of Verizon's territory and a joint research and development project would be permitted, but only for a limited period of time, Reuters reported, adding that the companies would like to see the negotiations wind up this month.
Verizon Wireless, the Federal Communications Commission and the U.S. Department of Justice all declined to comment to the news agency.