Many of the ramifications of the recent purchase of mobile spectrum from cable operators by Verizon Wireless are yet to be seen. But one immediate consequence of an accompanying deal between Verizon Wireless, Comcast, Time Warner Cable and Bright House Networks is that DirecTV will lose a potential partner.
DirecTV has been testing a method of modifying a standard DirecTV receiver so that it also can use Long Term Evolution networks operated by Verizon Wireless. With the recent deal between Verizon Wireless, Comcast, Time Warner and Bright House, it appears that future option, which would have allowed DirecTV to sell a dual-play package of broadband access and video, is now foreclosed.
Verizon began trialing LTE service with DirecTV in late 2010. But Verizon continues to resell DirecTV satellite video service in areas where it does not offer its own FiOS TV product.
Those ramifications show how complicated the business environment has become in the wireless and video businesses. Though cable operators are mistrustful of telcos, since they compete directly in video, voice and broadband access, cable operators also are seeing continuing inroads into their video product lines from the satellite and telco providers.
Aside from gaining access to a key product they historically have had difficulty mastering, the cable operators also prevent DirecTV from gaining the ability to offer an attractive dual-play service.
Verizon, on the other hand, gains the ability to sell cable products, out of region, while still retaining the ability to bundle DirecTV with 4G voice and broadband out of region, and gaining large wholesale customers as well.
On Dec. 2, Verizon Wireless agreed to buy 122 AWS wireless spectrum licenses covering 259 million people from SpectrumCo, a consortium of Comcast, Time Warner Cable and Bright House Networks, for $3.6 billion. That deal also includes several agreements that will enable the parties to sell each other’s products. By 2015, the cable companies will have the option to sell Verizon Wireless service on a wholesale basis. Verizon Will End LTE Trials With DirecTV