As reported elsewhere, the SpectrumCo partners, Comcast, Time Warner Cable and Bright House Networks, subsequently joined in the AWS spectrum selloff to Verizon Wireless by Cox Communications, appear to have settled on a new, cost-effective approach to remaining viable in wireless by leveraging advanced Wi-Fi networks and expanding new roaming agreements to provide metro-wide coverage for their broadband subscribers. And, four years down the road, they have the option to become MVNO (mobile virtual network operator) resellers of Verizon Wireless mobile, thereby providing a seamless transfer onto the LTE network as subscribers move beyond the reach of Wi-Fi service.
All well and good, but four years is a long time into an LTE (Long-Term Evolution) 4G mobile revolution that’s now in its earliest stages. Notwithstanding the MVNO and other long-term partnership arrangements that are part of the cable-Verizon Wireless agreements, including a new “innovation technology joint venture” to support integration of wireline and wireless services, will any of this really matter when it comes to what’s in store from a competitive standpoint?
Time Warner Cable CEO Glenn Britt stressed the fact that the cable companies have cut the deal with a mobile carrier that is partly owned by Vodafone and operates separately from the wireline triple-play provider, which competes aggressively with cable over its FiOS and DSL networks. But that separation is not the determining factor when it comes to looking at what could be in store over 4G in light of what’s already in play between Verizon Wireless and FiOS TV.
For over a year, Verizon has been offering a TV Everywhere service known as Flex View that allows FiOS TV subscribers to access premium TV content over their mobile links. While the FiOS team has worked assiduously to make sure the content is accessible over any 3G mobile service, the tight integration with Verizon Wireless has made the experience more compelling for Verizon Wireless subscribers than others. As Verizon senior vice president Eric Bruno told us in an interview published at the beginning of 2011 (January, p. 20), Flex View is “always going to work best on a Verizon platform, and it should.”
In that interview Bruno acknowledged Verizon was considering making its Flex View service available nationwide to consumers who don’t reside in the FiOS TV service areas, and he made clear the company hoped to eventually deliver live programming as well as archived content from the Flex View broadband portal. Since then there have been many hints that Verizon, now with over 4,000 titles on offer from Flex View, is moving toward a nationwide online subscription service, including a recent Wall Street Journal article reporting the company has been discussing licensing deals for such a service with media concerns.
Of course, numerous over-the-top providers are already in or nearing entry into the premium content game, which makes whatever Verizon does part of a much larger OTT ecosystem that threatens pay TV service providers. While FiOS Flex View well integrated with Verizon Wireless LTE might be especially attractive to Verizon Wireless subscribers, that carrier’s 4G subscribers will have ample access to many other sources of premium content as well.
Where the threat to the cable sellers of the AWS spectrum lies is in the fact that they’ve given Verizon Wireless a leg up in pursuit of the high bitrate throughput that is essential to making 4G a conduit for HD-quality TV content, whether it’s from FiOS, Netflix, Hulu, Amazon, Vudu, Google, Apple or somebody else. It’s not hard to imagine that, by the time the MSOs can mount their MVNO offerings with Verizon Wireless, the carrier will be well into a new era where a 4G connection is all you need to get all the services you want, including HDTV as well as voice and broadband.
Ceding that one-stop quadruple play service to a wireless company aligned with an arch competitor together with spectrum resources that put it ahead of all other mobile carriers in the race to 4G could turn out to be a huge mistake unless the cable companies somehow manage to get back in the mobile game with a more aggressive strategy than they seem inclined to pursue at this point.