Verizon Crosses Web Lines

As Verizon Communications pushes for more cable-television and high-speed Internet subscribers, a new competitor is emerging: its own subsidiary, Verizon Wireless.

This month, Verizon Wireless stores in Seattle and Portland (OR) began offering home Internet, cable and telephone service from Comcast as part of a new joint marketing deal between the cellphone provider and several cable companies. Verizon doesn't offer its competing FiOS broadband and TV service in those markets, but the marketing deal may eventually encroach into FiOS territory, people familiar with the deal say -- setting up an awkward clash within the telephone giant. The joint effort with cable companies was unveiled by Verizon Wireless last month as part of a $3.6 billion deal to buy spectrum licenses from Comcast, Time Warner Cable, and Bright House Networks. The Justice Department is investigating whether the deal will hurt competition and raise prices for cable customers, people familiar with the matter said. The deal surprised the telecom industry because it appeared to signal a truce between longtime rivals. Verizon is spending more than $20 billion rolling out FiOS to compete with cable, and cable companies -- already competing in the telephone market with their own landline products -- had amassed spectrum to potentially get into the wireless business. It also raised questions among union leaders and consumer advocates about Verizon's commitment to FiOS. Verizon insists it's committed to FiOS, a fiber-optic-cable-based service that reaches about 14% of U.S. households. But for longtime observers of the rivalry between Verizon and cable providers, the companies' marketing moves in past weeks may have prompted some double-takes.