Time Warner, a key player in a coalition of cable operators that succeeded in buying broadband wireless spectrum during the last FCC auction process, won't participate in the 700 MHz auction, Time Warner Cable CEO Glenn Britt said this morning. Speaking at the UBS Global Media Week and Communications Conference in New York, Britt said "We are not going to be in this particular auction."
Given that Time Warner isn't bidding for the prized spectrum, it's likely that the other cable partners in the earlier coalition, which includes Comcast, Charter, Cox and Brighthouse Networks, will also stay out of the bidding. (Comcast has confirmed it won't bid. See update below.) What this means is that cable operators probably won't pursue mobile wireless services in competition with their chief rivals, the incumbent telcos AT&T and Verizon.
How that will play out in the future is unclear. AT&T and Verizon are already bundling wireless service with other services, culminating in what could be a killer combination of landline and wireless voice, along with video and broadband services, the veritable "quadruple-play" package of services.
But Britt says that consumers really don't want a quadruple-play bundle. "I don't think the quadruple play is a big deal," he said. "So far we've not seen a great demand for that."
Time Warner hasn't completely thrown in the towel when it comes to wireless. "What we're doing is trying to understand that space..we do own some spectrum. We haven't completely decided yet how to use it."
One area of potential wireless telephony growth for Time Warner is the cellular backhaul business, where wireless carriers use cable networks to transmit calls from towers to landline phones, he said. "It may be that cable is where wireless gets dumped off in the network," he said.
Surprisingly, Britt seemed to acknowledge the competitive importance of Verizon Wireless' announcement that it will open its wireless network. "The announcements last week about Verizon opening up could be quite significant," he said.
Britt also seemed to tip his hat toward another rival, DBS provider DirecTV, which has gained traction recently by promoting its greater-than-cable number of high-definition TV channels. "I think it's clever on the part of DirecTV," he said. But Time Warner Cable should catch up with DirecTV on the HD front when it finishes retrofitting its plant to switched-digital technology. "We are putting in video switches which will allow us to have unlimited HD."
Britt also conceded that the phone companies have taken a competitive bite out of Time Warner's video business. "We've actually seen the impact of both of them [AT&T and Verizon], mostly in Dallas and L.A." where the systems were in disrepair and not offering triple-play services. "They've made good headway there, especially Verizon. Now that we're up and running with our own triple-play, we'll see how we'll do," Britt said.
Update: Comcast confirmed this morning that it will not bid in the 700 MHz auction, saying that the "20 MHz of spectrum acquired in the wireless auction last year with our cable partners in SpectrumCo provides us with significant long-term flexibility and many strategic options."
Cynthia Brumfield at 10:10 AM|Comments(1)
Must say this seems a bit surprising. But their call.
Posted by: David Mackey at December 4, 2007 12:21 AM
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