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Comcast's Smit, TWC's Britt saddle up on Verizon Wireless deal

Mon, 12/05/2011 - 2:09pm
Mike Robuck

While the shockwaves from Comcast, Time Warner Cable and Bright House Networks' decision to sell their wireless spectrum - through their joint venture of SpectrumCo – continue to settle, company execs hit their respective blogs to provide additional insights.

Time Warner Cable CEO Glenn Britt said the $3.6 billion sale to Verizon Wireless didn't mean the cable operators were backing off of their toe-to-toe battle with Verizon's FiOS video service, which was a sentiment also backed by Bright House Networks when the deal was announced on Friday.

"These agreements are with Verizon Wireless and relate to its wireless services. We'll continue to compete vigorously against Verizon FiOS," Britt said, according to the company's blog. "By working with the leader in wireless services, we will be able to compete effectively with all wireless and landline competitors. This is a smart and efficient way for TWC to deliver a broad array of wireless services alongside our suite of video, HSD and voice products. It makes sense for our business and for our customers. We do not believe it is feasible to enter the wireless market as a freestanding new entrant.

"This is an opportunity for each company to have access to and be able to sell both of our products. TWC and Verizon FiOS will continue to fully compete with each other. Verizon is a formidable competitor, both in FiOS and DSL markets, and we expect that to continue. As I said, the agreements are between us and Verizon Wireless, not Verizon FiOS. Verizon Wireless and Verizon FiOS are operated as two separate entities."

While there are still many regulatory rivers to cross, Time Warner Cable, Comcast and Bright House Networks have thrown their respective lots in with a varsity player on the wireless field of play, as opposed to past arrangements with Sprint-based Pivot and Sprint-backed Clearwire.

"Ultimately, the way forward for us involves giving customers any content, anywhere, any time and on any device. The world is becoming more and more mobile – and this deal is a smart and efficient way for TWC to offer consumers the mobility they want," Britt said.

Clearly, the cable operators want to be players in TV Everywhere-type services across multiple devices, which In-Stat's Gerry Kaufhold, research director for digital entertainment, pointed out on Friday.

With the cable operators and Verizon Wireless now able to resell each other's respective services, while retaining their own subscribers, it will also be interesting to see if there will be any new advertising models to come out of the deal.

Kaufhold also said the cable operators could end up offering their own white-label brand of Verizon Wireless' cell service, which Comcast Cable President Neil Smit confirmed in his Friday blog post after the initial news broke.

"Four years from signing, Comcast could become a reseller of Verizon Wireless' service through a mobile virtual network operator (MVNO) agreement," Smit write. "Comcast could purchase Verizon Wireless' service at wholesale rates, and then market and sell its own branded wireless service in connection with our bundled offerings, creating more choice for consumers. Time Warner and Bright House Networks are also entering into wholesale/MVNO agreements with Verizon Wireless."

The cable operators and Verizon Wireless will also work together via a joint venture in Philadelphia to develop new products and services that will integrate both wired and wireless technologies for consumers.

The deal may fall short of Bill Murray's character in "Ghostbusters" exclaiming, "Human sacrifice, dogs and cats living together ... mass hysteria!" But a few years ago, it would have been hard to imagine such strange bedfellows.

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