Joint Venture Between Verizon and Major Cable Companies

A Compass Lexecon team lead by Janusz Ordover and Andres Lerner assisted in obtaining U.S. Department of Justice approval for a joint venture between Verizon, Comcast, Time Warner Cable, Cox Communications, and Bright House Networks. The Compass Lexecon team included David Weiskopf, Nauman Ilias, Aren Megerdichian, Robert Oandasan, Jeff Tucker, and Matt Krietzberg. Compass Lexecon worked closely with counsel for each of the parties, including Janet McDavid of Hogan Lovells, Arthur Burke and Howard Shelanski of Davis Polk & Wardwell LLP, and Joseph Simons of Paul, Weiss, Rifkind, Wharton & Garrison LLP. The joint venture between the companies includes agency arrangements that allow Verizon Wireless and the cable partners to sell the services of the other party as well as a technology venture to develop and license technologies which integrate wireline and wireless services. Compass Lexecon experts, Janusz Ordover and Andres Lerner submitted several white papers and made presentations to the Department of Justice demonstrating that the transaction would not adversely affect competition in the provision of wireline services. Compass Lexecon’s analysis successfully showed that the sales commissions that Verizon Wireless would earn under the agency arrangement by selling cable services would not give Verizon incentives to raise the price of FiOS, despite its majority interest in Verizon Wireless and the fact that FiOS and the cable partners compete head-to-head in many geographic areas. Compass Lexecon’s analysis also showed that the transaction would not materially affect Verizon’s incentives to expand the FiOS footprint.

Another Compass Lexecon team, led by Mark Israel, supported by David Weiskopf, Jay Ezrielev, and Piyal Hyder presented analyses to the Federal Communications Commission (FCC) showing that the joint venture would not give the involved cable companies the incentive or ability to harm Verizon Wireless’ rivals through unattractive terms for backhaul or Wi-Fi offload services. Mark Israel submitted an expert report and, together with David Weiskopf, made a presentation to the FCC on these topics. Ultimately, the FCC placed no conditions on either backhaul or Wi-Fi offload services in its approval of the transaction. In addition to the attorneys listed above, this Compass Lexecon team worked closely with Michael Hammer, Brien Bell, and Mia Hayes of Willkie Farr & Gallagher LLP.