Verizon Wireless Adds Cox to its Cable Partners

Cox Communications announced December 16, that it has entered into an agreement to sell Verizon Wireless its 20 MHz Advanced Wireless Services (AWS) spectrum licenses covering 28 million POPs for $315 million. The deal plays on the joint venture announced by SpectrumCo. and Verizon Wireless which was revealed just a few weeks ago.

Cox and Verizon Wireless also announced that they plan to sell each other’s residential and commercial products and services through their respective sales channels. Over time, Cox may have the option to sell Verizon Wireless’ services on a wholesale basis. In addition, Cox expects to enter into arrangements with the innovation technology joint venture formed by Verizon Wireless and SpectrumCo. partners Comcast, Time Warner Cable and Bright House Networks, to better integrate wireline and wireless products and services.

“These agreements provide Cox customers with key enablers to mobility, such as access to Verizon Wireless’ 4G LTE network and iconic wireless devices,” said Pat Esser, president of Cox Communications. “We look forward to the many benefits this will bring to customers.”

The sale and transfer of Cox’s advanced wireless spectrum to Verizon Wireless is subject to approval by the FCC, and review under the Hart-Scott Rodino Act and other customary conditions.

As you may remember, Cox was initially involved in Sprint’s “Pivot” wireless venture along with Comcast Corp., Time Warner Cable Inc. and Bright House Networks. However, all the cable networks abandoned the service back in 2008. After Pivot Wireless fell apart, three of the big cable providers — Time Warner, Comcast and Bright House Networks – invested in Clearwire’s WiMAX venture.

For its part, Cox had grand plans to build its own wireless network, utilizing the spectrum it won in the FCC’s AWS and 700 MHz auctions. The initial idea was to utilize Sprint’s EVDO network, with Cox shifting users to its own LTE service once the network was built. However, Cox announced last month that it will no longer market its wireless service to new subscribers, and it plans to discontinue its current wireless service/subscribers on March 30, 2012.

Fast forward a few years and we now see the cable industry abandoning their wireless plans and turning en mass to Verizon Wireless for the wireless component of their quadruple-play bundles. In addition to new, powerful partnerships with leading cable companies – and their subscribers — Verizon Wireless has gained access to valuable wireless spectrum. It remains to be seen how this new alliances will change the landscape of the telecom industry and, as promised by the participants, how the companies plan to further integrate innovative wireline and wireless services.