Comcast Keeps Mobile Spectrum Sidelined
"I think there's a real goal to make sure that the Clearwire partnership is successful and works well for us, and meets the goal objectives we have," Comcast CFO Michael Angelakis said today when asked to provide an update on the AWS holdings at the Goldman Sachs & Co. "Communacopia" conference in New York City.
SpectrumCo -- a consortium made up of Comcast, Sprint Corp. (NYSE: S), Time Warner Cable Inc. (NYSE: TWC), Cox Communications Inc. , and Bright House Networks -- won 137 wireless spectrum licenses for AWS for a combined $2.37 billion. Comcast put forth $1.29 billion of that total. Sprint dropped out of the AWS consortium in 2007, but is still connected to Comcast, TWC, and Bright House via the Clearwire partnership. (See Sprint to Exit SpectrumCo Venture , SpectrumCo Gets Licenses , and Cable Plays Clearwire Card.)
"I think it [the AWS spectrum] is an appreciating asset, and from our standpoint, we will continue to hold it and make sure Clearwire is successful," Angelakis said.
Comcast has launched High-Speed 2go, its WiMax service, in Portland, Ore., and Atlanta, with new launches tracking Clearwire's future WiMax buildout. Angelakis said as many as 35 percent of the customers who take High-Speed 2go are brand new to Comcast. (See Comcast Maxes Out in Portland and Comcast's All Clear in Atlanta.)
He said Comcast is happy wholesaling Clearwire and offering a wireless broadband product that will give the MSO access to enough spectrum to cover its core markets. But he left the door open to a WiMaxian voice play.
Angelakis volunteered that there's been "lots of discussion" about WiMax voice clients. "I don't want to say much more than that," he said. "But I think data is really an important product for us to lead in the wireless side."
He acknowledged that the AWS spectrum Comcast won would allow the MSO to "actually build a network," but Comcast concluded that the holdings wouldn't give the MSO enough "to do what we really want to do," Angelakis said. "We don't want to be the seventh competitor in a market that we think is mature from the voice side, and it's a huge economic investment, which we are uncomfortable there is a real return for."
Angelakis believes Clearwire will need additional funding, but said Comcast isn't under any obligations to invest further. "We have preemptive rights, but... we are only an 8.5 percent shareholder."
As for future use of Clearwire's "virgin spectrum," Angelakis said the MSO "can envision some point in the future" using it to give Comcast's TV Everywhere strategy a wireless component. Today, the MSO is testing its On Demand Online service with about 5,000 customers, allowing them to view shows and premium programming via broadband to the PC as part of their regular cable TV subscription package. Comcast is within two months of a national launch. (See Comcast Nears 'TV Everywhere' Launch.)
— Jeff Baumgartner, Site Editor, Cable Digital News
Since Comcast has no near-term plans for this spectrum (at least it's not ready to reveal anything specific right now), what should Comcast do with it? Angelakis suggested that the spectrum Comcast paid handsomely for is appreciating, so it makes me wonder if they're thinking about unloading it. But who would want it? Could it help out Cox, which already has a piece of AWS and 700MHz spectrum for its wireless buildout? I'll also have to look into how long Comcast can horde AWS holdings before having to act on it.