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Verizon defends cable deal redactions

Mon, 02/13/2012 - 3:07pm
Maisie Ramsay, Wireless Week

Verizon Wireless is refusing to reverse redactions about its marketing side deal with cable operators forged in its $4 billion acquisition of their AWS spectrum.

DirecTV, T-Mobile USA, Sprint and a number of other groups have asked the FCC to halt its review of the transaction until Verizon discloses additional information about the arrangement.

They argue that the information is critical, since the spectrum sale "appears to be only one small part of what could be a significant realignment of the competitive landscape in these industries."

Verizon says the disclosure is unwarranted and unprecedented.

"The fact that [Verizon's competitors] … are attempting to leverage a spectrum transfer proceeding to gain access to proprietary pricing and marketing information they would never have access to in the normal course underscores why they should not be allowed such access," Verizon said in a letter sent Friday to the FCC.

Being forced to disclose information on pricing, compensation and marketing strategies would "significantly harm" both itself and the cable operators it is working with, Verizon argued.

Verizon is shelling out $3.6 billion for 122 AWS licenses owned by Comcast, Time Warner Cable and Bright House Networks, and it inked a separate deal to buy Cox Communications’ AWS holdings for $315 million. The airwaves will be used to bolster Verizon's LTE network.

In addition to the spectrum sale, the companies agreed to cross-selling arrangements and formed a joint venture aimed at creating new products that integrate wireless and wireline services. Comcast and Verizon are already teaming up on products offered in Seattle and the San Francisco Bay area.

Verizon originally fought any disclosure of the side deal, claiming it was irrelevant to the FCC's review of the spectrum sale, but eventually relented to "avoid undue delay" and submitted edited documents.

Public Knowledge argues the redactions went too far – "in several cases, blacking out more than 10 pages at a time" – but Verizon described them as "limited, reasonable and consistent with past Commission rulings."

“The Commission previously upheld the use of redactions when disclosure of the redacted material was irrelevant to the Commission’s review of a transaction – even when the agreement at issue, unlike here, was required by rule to be submitted with the application," Verizon said, citing the FCC's handing of transactions such as the merger between Comcast and NBCUniversal.

The full text of its marketing arrangement is available to the FCC for private viewing at the Justice Department, which is conducting its own review of the acquisition.

Other parties in the transactions, including Verizon's competitors, do not have access to the full-text file.

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