Verizon Wireless and Comcast today began selling each other’s cellular and cable services in Colorado and five other markets.
The marketing arrangement was forged at the same time Verizon agreed to buy $3.9 billion worth of AWS spectrum off Comcast and three other cable operators, Cox Communications, Bright House Networks and Time Warner Cable.
The spectrum deal is still being reviewed by the government. Insisting the marketing is separate from the AWS sale, the companies have pushed forward with cross-selling despite lacking approval for the spectrum transaction.
Customers in the Denver metro area and Colorado Springs will be able to buy Verizon’s wireless service at Comcast stores, and Comcast service at Verizon stores. The companies are working to lure in new subscribers with rebate cards ranging from $50 to $300 and bundled plans with faster speeds and higher allotments of mobile data.
The tie-up has also been expanded to Atlanta; Chicago; Kansas City, Mo.; Minneapolis-St. Paul, Minn.; and Salt Lake City.
Analyst Jeff Kagan questioned the wisdom of risking brand confusion to reach a greater customer base, since Verizon Wireless would be offering cable services that compete with the FiOS service from the wireline division of the company.
“At best, this Verizon Wireless deal with Comcast will cause great confusion in the marketplace with brand recognition,” Kagan said in a research note. “Verizon Wireless will become a direct competitor to Verizon and that will just confuse the heck out of the marketplace that thought these two companies were the same.
There is “potential” for success, Kagan said, but “there is also the potential to seriously injure the value of the Verizon, Verizon Wireless and Comcast brand.”
The companies launched their partnership in Portland, Ore.; San Francisco and Seattle earlier this year. Verizon has also begun cross-selling its wireless service with Time Warner Cable.
Verizon and its cable partners say the marketing arrangement is separate from the spectrum transaction.
The companies faced intense scrutiny over the agreement during a March hearing before the Senate Judiciary Committee, which questioned whether the deal amounted to a “de-facto non-compete agreement” between Verizon’s FiOS service and the cable companies.
The FCC also has questioned the companies about the marketing agreement in its review of the AWS deal. It has not told them to stop selling cable and wireless service in each other’s stores.