Is AT&T Messing Up Cablevision's Mobile Plans?
Source: Jeff Baumgartner
Cablevision Systems Corp. (NYSE: CVC) hasn't acknowledged that it was once eager to strike a wholesale partnership with T-Mobile USA , but it sure looks that way when one reads between the lines in some Federal Communications Commission (FCC) filings.
Its interest in working with the carrier is apparent in partly redacted comments the MSO filed in June, urging the FCC to pin some wholesale-specific conditions on the planned AT&T Inc. (NYSE: T) acquisition. As detailed in this more recent ex parte filing, the MSO reiterated its viewpoints during some face-to-face meetings with FCC staffers. (See AT&T to Buy T-Mobile USA for $39B and AT&T Won't Stifle T-Mobile's Phone Selection.)
Cablevision argues that an "independent" T-Mobile would play a big role in boosting wireless competition, "because it is one of only two nationwide carriers willing to enter into the type of wholesale partnerships sought by providers like Cablevision."
Cablevision has been hinting that it's pursuing a way to match its Wi-Fi rollout with a cellular complement that would support dual-mode devices. It even trademarked a product name for what it evidently has in mind: Optimum Mobile. (See Cablevision Trademarks Mobile, RS-DVR Brands.)
The second willing carrier that Cablevision refers to would be Sprint Nextel Corp. (NYSE: S), which has a history of working with cable operators. Cox Communications Inc. is piggybacking its mobile voice and data service on Sprint's 3G network, and Comcast Corp. (Nasdaq: CMCSA, CMCSK), Bright House Networks and Time Warner Cable Inc. (NYSE: TWC) are offering WiMax data services via Clearwire LLC (Nasdaq: CLWR), in which Sprint has majority ownership. (See Cox May Tear Down Wireless Network.)
Keen on GSM
So, why can't Cablevision just work with Sprint? It looks as if nothing would prevent that, but Cablevision seems rather partial to T-Mobile's GSM platform, going as far as labeling the technology as a "worldwide standard" and arguing that it would be easier and cheaper to enter the cellular market using GSM than it would with CDMA.
Bottom line, Cablevision's fearful that AT&T will be reluctant to play the wholesale game once it swallows T-Mobile and holds a domestic "GSM-based monopoly."
As for T-Mobile, Cablevision claims it "has been ready and willing to enter meaningful wholesale partnerships, or that ..." What follows are some of the filing's "HIGHLY CONFIDENTIAL" redactions.
Cablevision does point to Clearwire and LightSquared as options in the absence of T-Mobile, but the MSO questions whether they'll stick around. A Wi-Fi/cellular partnership, Cablevision argues, would involve sunk network and handset costs and would "require some certainty of long term stability on the part of a potential partner, which Clearwire and LightSquared currently lack." (See Cablevision Also Kicking LightSquared's Tires? )
And those are just some of the more significant reasons why Cablevision isn't wild about the idea of AT&T buying T-Mobile.
If the FCC approves the deal, Cablevision wants conditions applied, including one that would require AT&T to open its network so consumers can use any compatible mobile device on it, something the MSO believes would at least facilitate "wholesale-like" partnerships. Another condition would be expanded data roaming requirements that permit wholesale or roaming access to AT&T's radio access network using licensed or unlicensed spectrum.
Expect Cablevision execs to field questions about its mobile future on Tuesday morning (Aug. 9), when the company hosts its second-quarter earnings call.
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