But let’s face it. This is but a first step in what remains an ill-defined work in progress which may or may not serve cable operators’ long-term interests in an increasingly wireless-centric market environment.
As reported elsewhere (p. 16), individual MSOs’ Wi-Fi build-out plans vary considerably, ranging from use of the technology to create a metro-wide contiguous mobile-capable footprint to concentration on high usage areas for purposes of extending broadband service reach wherever subscribers tend to congregate. In the latter category are at least some if not all of those who look to future deals with Verizon Wireless where they might be able to brand their own mobile services using the carrier’s LTE network.
One indication of the growing comfort zone of cooperation between MSOs and one of their former arch enemies from the telco ranks was Verizon’s presence at the Cable Show in Boston last month, where Verizon Wireless president and CEO Dan Mead announced Comcast is participating in “viewdini,” a new mobile video portal app that exposes content from various sources for easy navigation and access through the LTE network. Comcast felt Verizon Wireless “would be a great partner to help our customers discover the content,” said Comcast Cable president and CEO Neil Smit.
No doubt, to whatever extent Comcast’s program suppliers accord it rights to make content available outside the home to authenticated subscribers, its customers will benefit from the convenience of being able to get their programming over their 4G smartphones. If that’s their preferred access route versus a local Comcast or MSO partner Wi-Fi hot spot, so be it. It’s all about the consumer.
In today’s market where we’re only in the first phase of the LTE infrastructure build-out and rights restrictions favor incumbent distributors, partnering with the wireless giant while giving up on a big infrastructure play may look like a capital-efficient way to leverage opportunities in wireless. But to be without at least a local mobile-capable contiguous wireless infrastructure such as is now enabled by carrier-grade Wi-Fi technology is to be highly vulnerable to changes in a volatile marketplace that could work to great disadvantage against the MSOs.
Consider, for example, the fact that LTE, once it’s fully operational with state-of-the-art technology, will be not only a 100 megabit-per-second-plus service but also capable of delivering saturation coverage at much greater levels of radio-spectrum efficiency than current generation mobile infrastructure can deliver. What’s in store along these lines was a subject of a ScreenPlays article in February 2011 (p. 8).
Consider, too, what the competitive environment will look like if Verizon’s FiOS TV team succeeds in their acknowledged pursuit of rights not only to deliver premium content to authenticated in-territory FiOS subscribers wherever they may be but also to selling that content to Verizon Wireless subscribers who live outside the FiOS TV footprint. A wireless-only quad-play subscription with in-home distribution possibly boosted by a gateway router that translates the 4G input to Wi-Fi for all the connected TVs and other devices does not seem far-fetched at all if the rights damn breaks.
And why wouldn’t it? If Verizon can deliver a FiOS premium-quality TV service over its LTE network with a ubiquitous nationwide footprint why wouldn’t programmers license their content as readily as they have to cable’s satellite and wireline telco competitors?
Cable strategists’ sanguine response might be, well, we’ll have our own branded LTE services to offer as well, once we do our MVNO deals with Verizon Wireless. Ah, but how does that compute with cable operators’ avowed commitment not to compete with each other? And what’s to say that, even if Verizon proves willing to negotiate the MVNO deals, the terms will be such that the cable guys can compete pricewise with Verizon Wireless on the all-mobile quad-play bundle?
The point here isn’t that these particular scenarios are inevitable. It’s that cable operators by stinting on an infrastructural commitment to controlling as much of their wireless destiny as possible render themselves vulnerable to long-run trends that are not shaping up in their favor.