Fox Sports and NBC Universal are rejecting Verizon Communications' plans to offer their networks as part of smaller, cheaper pay-TV packages, claiming the service violates contract agreements.

"We reject Verizon's view that it can pursue the new packaging scheme it announced yet still comply with our agreements," the sports unit of 21st Century Fox said Tuesday in a statement. "That said, we prefer to keep our commercial discussions confidential, and we will continue to address our concerns directly and privately with Verizon."

Verizon began selling smaller bundles of channels on Sunday in a break with the industry's longstanding strategy of forcing customers to pay more than $80 monthly fees for hundreds of channels, many consumer watch.

The dispute threatens to derail efforts by Verizon, one of the largest pay-TV providers, to offer a narrower, lower-priced version of its FiOS service. Walt Disney Co.'s ESPN was the first programmer to say Verizon didn't have the right to offer its channel in these packages.

The Wall Street Journal reported earlier Tuesday that Fox and Comcast Corp.'s NBC Universal were rejecting the plan.

The newspaper also quoted Verizon's chief financial officer saying the company was contractually within its rights and isn't going to back down.

~ Bloomberg News ~