In what can be seen as a rather unconventional deal, Verizon Wireless has worked out an agreement with three cable firms - Comcast, Time Warner Cable and Bright House Networks - which will sell their unused wireless licenses to the carrier for a whopping $3.6 billion.
The marketing, airwave deal, which was disclosed on Friday, implies that the three cable firms will no longer pursue their dreams pertaining to the creation of their own wireless networks, as they have now opted to resell the service offered by Verizon Wireless.
The agreement has come as a surprise because the cable companies have traditionally been competing with Verizon Wireless' parent, Verizon Communications, for phone as well as cable-TV customers. However, that scenario has now become a thing of the past, with the Verizon Wireless stores to henceforth sell cable service.
The deal - which, as per Sanford Bernstein analyst Craig Moffett, "amounts to a partnership between formerly mortal enemies" - will evidently lead to a change in the manner in which cellphones, TV, and the Internet are accessed by consumers, since th egerouping of the firms will give them a substantial hold over mobile and home entertainment.
Meanwhile, with the deal yet to be reviewed by regulators at the Department of Justice and the Federal Communications Commission, an `inside' source familiar with the concerns of federal antitrust officials said: "A flag is raised when two rival networks move to start selling each other's services. They lose their desire, impetus, to compete. That is a big antitrust flag."