Three of the nation's biggest cable companies – Comcast, Charter and Cox – collectively bid over $1 billion in recent weeks for valuable midband spectrum that's ideal for 5G.

"Cable operators were active [in the FCC's CBRS spectrum auction], buying 19-24MHz across their wireline footprints, with the three biggest MSOs combining to spend $1.14B for 4.6BMHz-POPs ($0.25 per MHz/POP)," wrote the Wall Street analysts at Evercore in a recent note to investors. The MHz/POP figure is a standard way of measuring the value of spectrum by the number of people covered compared with the amount of spectrum available.

"Interestingly, Comcast was actually more aggressive than Charter. Comcast added at least 20MHz of spectrum depth in 100 million POPs, while Charter achieved that depth in only a handful of markets," wrote the analysts at Wall Street research firm LightShed Partners. Cox, for its part, is expected to join Comcast and Charter in the mobile industry soon, likely via an MVNO deal with AT&T and T-Mobile.

The only major cable company to sit out the FCC's recent CBRS 3.5GHz midband spectrum auction was Altice USA, which offers mobile service via a deal with T-Mobile. However, Altice USA appears a bit busy with a so-far-unsuccessful bid to acquire Cogeco's US-based Atlantic Broadband operations.

"The solid results across cable [in the CBRS auction] suggest their seriousness about building an 'inside-out' wireless network to help alleviate roaming costs they currently pay to Verizon as part of their MVNO agreement," wrote the Wall Street analysts at Cowen in a note to investors. They estimaed that Charter and Comcast will pay Verizon between $600 million and $700 million every year in MVNO costs.

Presumably, the cable companies' collective next step in mobile will be to begin purchasing cell tower equipment to start broadcasting 5G signals in their shiny new spectrum assets.

Open RAN risk vs. reward
But one big question that will be facing Comcast's Greg Butz, Charter's Danny Bowman and other top cable executives in the mobile industry will be: What equipment should they purchase? And should it support open RAN technology?

This issue is facing a number of other so-called "greenfield" operators, providers that are new to the mobile industry and don't operate legacy 3G and 4G networks. They can either travel the "standard" path by purchasing traditional 4G and 5G equipment from heavyweights like Ericsson and Nokia, or they can venture down a new and mostly untested route that involves open RAN technology from smaller but potentially more nimble, flexible and less expensive equipment vendors.

Upstart companies like Japan's Rakuten and Dish Network – also new to the mobile industry – have wholeheartedly embraced the open RAN trend. Indeed, Rakuten has been moving away from the established vendors like Nokia and Cisco that supplied its existing 4G network in favor of smaller, open RAN suppliers like NEC and Airspan for its 5G buildout. Dish, meantime, has so far eschewed the big equipment providers entirely in favor of Fujitsu and others.

Others, though, are remaining on the well-trod path. T-Mobile US, for example, continues to rely on Nokia and Ericsson for its massive five-year, $60 billion 5G upgrade. The company has so far declined to participate in most open RAN discussions.

Walking in their shoes
The choice for the big US cable companies is stark: Open RAN equipment could allow them to mix and match vendors and keep costs low, but it could also force them to do more integration work and – potentially – could saddle them with a less capable network. On the other hand, the selection of a traditional vendor would likely ensure a relatively smooth buildout and speedy network, albeit at a potentially higher price.

Cable executives don't necessarily have the reputation of making risky decisions or embracing new trends. After all, many cable companies still have both feet squarely planted in a pay-TV market that's clearly being overtaken by the likes of Netflix, Amazon Prime and Disney+.

However, cable executives are also under pressure to turn their mobile businesses into profit centers. For example, the Wall Street analysts with Cowen noted recently that Comcast's Xfinity Mobile service appears to be on track to reach financial breakeven by the end of next year with a total of roughly 3 million to 3.5 million lines of service. Open RAN could either supercharge this goal or put it further out of reach, depending on how it's implemented.

It's unclear which path cable executives will take. Will they risk edging closer to mobile profits, or will they protect their flank by choosing established vendors? There's a saying in the mobile industry: No one ever got fired for selecting Ericsson.

Only time will tell which way the cable companies move. They're currently unable to discuss the topic publicly due to FCC regulations.

— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano