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Verizon pulls plug on joint venture with cable companies, but cross-promotion will continue

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Alongside Verizon's purchase of valuable spectrum from Comcast, Time Warner Cable, and a few other cable providers, the companies also entered into a sales and innovation "joint venture." In addition to sales partnerships (like Verizon selling Comcast services at its stores and Comcast bunding Verizon Wireless products), the companies also put together an "innovation technology joint venture for the development of technology to better integrate wireline and wireless products and services." It was a potentially interesting partnership, but now at least one aspect of it has been dissolved. CFO Fran Shammo said today on Verizon's Q3 earnings call that "the marketing joint venture or co-development [with the cable companies] has been terminated and we are moving in our separate ways on that."

However, and perhaps more importantly, Verizon's sales partnership with the cable companies will continue on. A Verizon spokesperson told us that "the commercial agreements with the cable companies remain in place. The companies will continue to offer each other's products and services in various distribution channels." Shammo hinted at this on the earnings call, saying "we still have a distribution agreement with one another and we continue to work with one another to sell each other's products." It's an agreement that raised some antitrust concerns, but apparently the partnership will continue unabated for now. There was also a lot of speculation that such a partnership would disincentivize Verizon from expanding FiOS coverage — something that's been an ongoing concern for a lot of would-be customers.

As for the "innovation joint venture," Verizon's spokesperson gave us the following statement:

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. 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.

Judging from the statement, it seems fair to say that Verizon and its partners just weren't quite sure what to do with each other — which makes moving on probably a sound idea.