Cable's 3 Wireless Whiffs
The Federal Communications Commission (FCC) 's blessing of the spectrum sales on Thursday all but clinched it, though the deals were never really in any serious doubt. In fact, Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Time Warner Cable Inc. (NYSE: TWC) had already begun to market cable/mobile bundles. (See Verizon Wireless's Spectrum Deals Sail Through .)
While the U.S. Department of Justice added some conditions, none are huge. For instance, while Verizon Wireless can't bundle cable services where its cable partners and FiOS compete, the DoJ places no such restriction on the MSOs. (See Verizon Wireless's Cable Cold Zones and Cable OK to Attack FiOS With Verizon Wireless.)
The DoJ also freed up Comcast, TW Cable, Cox Communications Inc. and Bright House Networks to operate under an MVNO model starting pretty much anytime (with six months' notice), erasing a four-year restriction that was in the original Verizon Wireless deal. That might open the door for some "disruptive" hybrid wireless services, Sanford C. Bernstein & Co. Inc. analyst Craig Moffett suggested. (See Cable's MVNO Option May Speed Wi-Fi Rollouts.)
Still, cable's recent history with mobile isn't stellar. The cable guys are betting this strategy is the one that works, as it might be their last, best chance at making it in mobile.
Here's a look back at three notable misses.
Cable ditches Clearwire
Comcast, TW Cable and Bright House put their weight behind WiMax and threw some cash at Clearwire LLC (Nasdaq: CLWR) in mid-2008, but the relationship fizzled soon after those MSOs hitched their wagons to Verizon Wireless. Comcast and TW Cable ended their wholesale deal late last year, and it's not like they had set the world on fire with it, signing up fewer than 60,000 subscribers. Bright House never did get around to launching a WiMax service. (See Comcast, TW Cable to Halt Clearwire Sales and Cable Plays Clearwire Card.)
The Cox calamity
Of all U.S. MSOs during this time period, Cox had the most ambitious wireless project. The operator piggybacked on Sprint Corp. (NYSE: S)'s 3G network and also set out to build its own Long Term Evolution (LTE) network using the AWS and 700MHz spectrum it bought at auction for about $550 million.
Cox smartly pulled out in November 2011, shutting it all down after launching 3G services in about a dozen markets but before getting its own network off the ground. Cox said it couldn't achieve enough scale to compete with mobile rivals and lamented its inability to access "iconic wireless devices." Sprint, of course, did eventually get the iPhone. (See Cox Pulls Out of Wireless and Cox Dodges iPhone Question.)
The Pivot divot
Comcast, TW Cable, Cox and Bright House scuttled Pivot, the wireless joint venture with Sprint, in the spring of 2008, claiming, among other things, that the tie-up was "operationally complex" and, foreshadowing the excuse Cox would use later, that they could not envision it scaling into a national wireless offering. Plus, they just couldn't figure out how to sell it. Sprint's erstwhile MSO partners never revealed how many subscribers Pivot managed to get, but this statement from a TW Cable official about the end of Pivot summed it up perfectly: "We're not expecting a big uproar." The cable guys chalked it up as a good learning experience. (See MSOs Pivoting Away From Sprint JV.)
We'll see if they learned their lessons, or if they will repeat the mistakes of the past.
— Jeff Baumgartner, Site Editor, Light Reading Cable