Comcast and Charter have previously announced separate efforts to launch MVNO wireless service on Verizon’s network, but the cable giants aren't going it alone after all.

According to a Sunday report from the Wall Street Journal, Comcast and Charter agreed to form a wireless partnership. As part of the terms of the deal, sources said neither company would be permitted to complete a wireless-related merger without the other’s blessing.

The WSJ report – including the detail around wireless transactions – was confirmed by Comcast and Charter in a joint press release on Monday.

Comcast indicated the partnership would help the companies capitalize on “operational efficiencies” by working together on common operating platforms, technical standards development and harmonization, device logistics, and emerging wireless technologies. Additionally, the companies agreed to work “only together with respect to national mobile network operators, through potential commercial arrangements, including MVNOs and other material transactions in the wireless industry, for a period of one year.”

Charter and Comcast’s CEOs noted the collaboration is expected to result in “more choice, innovative products, and competitive prices” for customers across each of their footprints.

“At Charter, we have a tremendous opportunity in front of us in the wireless space. Within our footprint, our network is perfectly suited to provide the data-rich wireless services that customers are increasingly demanding. By working with the team at Comcast, we can not only speed Charter’s entry into the marketplace, it will also enable us to provide more competition and drive costs down for consumers at a similar national scale as current wireless operators,” Charter CRO Tom Rutledge commented. “We look forward to working with Comcast through this innovative arrangement and bringing our focus on superior products and services, craftsmanship, and quality customer care to the wireless space."

Interestingly, the deal comes just days after Rutledge noted Charter was "happy" with its MVNO agreement, and wasn't worried about not picking up 600 MHz spectrum in the FCC's recent auction. Rutledge’s comments during Charter earnings call came despite opinions from analysts like MoffettNathanson last month that the company is “left with few options for wireless outside of their Verizon MVNO,” and could be stuck “in a pickle that can only be remedied by buying a wireless operator.”

M&A impact

The partnership’s implications for merger and acquisition activity in a market ripe for transactions (given the recent end of the FCC’s quiet period) has already sparked chatter from analysts and onlookers.

BTIG’s Walter Piecyk observed in a Monday note that the joint approach to wireless could “better enable both cable operators to join together to buy an existing wireless operator or a slug of spectrum from Dish to build a network on top of its expanding fiber footprint.” But there are other options on the table besides a T-Mobile or Sprint deal, he said.

The partnership provides a safer route for Comcast to evaluate the benefits of its position as a reseller, and helps Charter strengthen its position for a deal of its own after a year’s time. The agreement, though, also prevents either company from selling itself without the other’s go-ahead, effectively blocking, say, a Verizon-Charter hookup. That puts Verizon in a bit of a bind in the near term, and preserves Comcast’s option to attempt a Charter merger of its own, if it indeed wants one, Piecyk said.

Several other voices, though, took to social media to question the legality of the deal under U.S. antitrust laws. Among them was Public Knowledge SVP and Attorney Harold Feld.

Comcast and Charter on Monday disclosed the full details of the partnership to the Securities and Exchange Commission, and so far, there’s been no backlash from other regulatory bodies like the FCC. In fact, on Friday Chairman Ajit Pai said in a speech reflecting on his first 100 days the wireless space is currently “competitive.”