Comcast, Time Warner Cable to market wireless services after selling spectrum to Verizon

Comcast, Time Warner Cable and Bright House Networks struck a $3.6 billion deal to sell advanced wireless spectrum to Verizon Wireless. The agreement could see the MSOs market mobile phone and data services to cable subscribers, and eventually allow Verizon Wireless to sell cable programming to its subscribers.

In 2006, Comcast, Time Warner Cable and Bright House spent $2.4 billion to acquire advanced wireless in an FCC auction through a joint venture called SpectrumCo. The cable MSOs announced Friday that they agreed to sell that spectrum to Verizon Wireless for a $1.2 billion profit.

Neil Smit, Comcast Cable

Smit

The deal could allow the cable MSOs to market a quadruple play of digital video, high-speed Internet and landline and mobile phone services to their customers. Verizon already markets a quadruple play to its subscribers, offering a $10 discount on mobile phone services to customers that buy all four products.

Verizon and the cable MSOs didn't detail the types of services that they will offer, but Comcast Cable Communications president Neil Smit said that integrating WiFi would be a part of the strategy from the nation's largest cable MSOs. "These agreements, together with our WiFi plans, enable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services," Smit said in the announcement.

While Comcast and other cable MSOs have expressed interest in distributing pay TV programming to subscribers through mobile phones and tablet computers such as Apple's iPad, the contracts cable MSOs have with major programmers such as Disney, Time Warner and News Corp. don't include rights to mobile video.

The cable MSOs may face challenges winning approval of the deal from the Federal Trade Commission and the FCC, which have encouraged cable operators and telcos to compete for subscribers.

Under terms of the agreement, Comcast, which owns 63.6 percent of SpectrumCo, would get $2.3 billion from the spectrum sale. Time Warner Cable, which owns 31.2 percent of SpectrumCo, would get receive $1.1 billion. And Bright House will get $189 million for its 5.3 percent stake of SpectrumCo.