Verizon Communications Inc. said on Wednesday it signed its first video deal with a unit of Time Warner Inc., allowing it to carry Turner Broadcasting channels on its fiber-optic video service.

Verizon, the largest U.S. telecommunications company, is launching its Fios video service later this year to more effectively compete against cable companies such as Time Warner and Comcast Corp. that are pushing telephone services.

Verizon said the agreement will allow it to carry several Turner channels, including CNN, TNT, TBS, Cartoon Network and Turner Classic Movies.

Terry Denson, Verizon's vice president of programing and marketing for Fios television, said in an interview with Reuters last month that Verizon would offer about 300 video and audio channels, along with about 2,000 video-on-demand titles, by the time it launches the service broadly next year.

Denson had said at the time that Verizon had seen no unusual resistance to agreements with entertainment companies that also own cable systems. In addition to the Turner channels, Time Warner also owns the HBO pay cable channel.

Verizon has said it hopes to make at least 3 million homes and businesses accessible to its fiber-optic lines by the end of the year. While connecting customers with fiber optics can cost over $1,000 per building, Verizon has said the upgrade was necessary to compete head-on with cable.

In most of the 14 states where Verizon is building fiber- optic connections, it needs a franchise from local governments to sell a video service. Verizon executives say they will likely need thousands of such agreements, but so far have only six and that could delay the roll-out.

Last week, two U.S. lawmakers introduced bills that would eliminate the need for Verizon and SBC Communications Inc. to seek franchises for their video services.

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