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Verizon Wireless/Cable Tech Innovation J.V. ‘Terminated’

Verizon CFO Fran Shammo Said Mobile/Cable Co-Marketing Deals Remain Intact 10/17/2013 10:41 AM Eastern

A cable/wireless innovation technology joint venture linked to a larger deal originally forged by Verizon Wireless, Comcast, Time Warner Cable and Bright House Networks in December 2011 “has been terminated,” Verizon Communications chief financial officer Fran Shammo said on the company’s third quarter earnings call on Thursday morning.

Shammo said Verizon Wireless and its cable partners are heading in “separate ways” with respect to the technology J.V., but stressed that the commercial relationships, which include the co-marketing and bundling of mobile and cable services, remain intact. He said the decision to scuttle the innovation J.V. came in  the wake of Verizon's pending deal to snap up Vodafone’s 45% stake in Verizon Wireless for $130 billion.

In a statement to Multichannel News, a Verizon Wireless spokeswoman reiterated Shammo’s comment, adding that the innovation technology joint venture was dissolved in late August.

“The joint venture was formed to bring innovation to the marketplace and enhance the customer experience through technology that integrated wireline and wireless products and services,” the statement continued. “Evolving technology and market changes since the joint venture was formed have led all parties to conclude that a joint venture, per se, is no longer needed to deliver innovative services to customers. Verizon Wireless and the cable companies will continue to explore ways to collaborate on technology in the future. Each company remains committed to bringing innovation to its customers and will continue to find ways to optimize the user experience for each company’s products.”

The technology J.V. was part of a broader deal announced in late 2011 in which Comcast, Time Warner Cable and Bright House Networks agreed to sell their Advanced Wireless Services spectrum licenses to Verizon  Wireless for $3.6 billion. The J.V. was tasked with developing technology to better integrate wireline and wireless products and services.

At the time, Sam Schwartz, then the president of Comcast Converged Products, was tapped to lead the J.V.’s strategic development (Schwartz is now the chief business development officer of Comcast Cable), while Tony Heymen, then the VP of new product development at Verizon Wireless, was named head of the J.V.’s operations and distribution segment. In December 2011, Cox agreed to sell its AWS spectrum to Verizon Wireless for $315 million. Cox and Verizon Wireless also co-market each other’s services, but Cox was not formally linked to the technology J.V.

The technology J.V. was expected to come to an end, just not this early. As part of the conditions set by the U.S. Department of Justice in August 2012, Verizon Wireless and its cable partners were to dissolve the innovation/technology J.V. by December 2016, unless they received permission from the government to extend it.

The J.V. kept fairly quiet since its inception, and did not formally announce any specific products.

In May 2012 at The Cable Show, Verizon Wireless and Comcast did connect on “viewdini,” a mobile search/discovery portal optimized for Verizon Wireless’s 4G/LTE network that provided access to movies, TV shows and other content from Comcast, Hulu Plus, and Netflix and other content sources.

A Verizon Wireless spokeswoman confirmed that viewdini, launched in June of 2012, was a product of Verizon Wireless, and not part of the innovation J.V.

And viewdini is no longer available. “Beginning in early October, customers who launched the app received a message advising that Viewdini would no longer be available, effective Oct. 17th,” the company said via email. “Now, customers have many choices as their video consumption continues to grow over the Verizon Wireless 4G LTE network, like Redbox Instant by Verizon. This change is simply Verizon evolving our offerings to match customer needs and redeploying our resources to support future innovation."

Although the commercial relationship between Verizon and its MSO partners remains, the innovation pact is the latest mobile/wireless-focused joint venture to not pan out for the cable industry. Previous partnerships between MSOs and Clearwire and Sprint Nextel have folded.

September