Comcast and friends
Forget about competition among the top three cable television companies, namely Comcast, Time-Warner, and Cox Communications. Not only did Comcast and Time-Warner amicably agree to split the assets of Adelphia last year, but a joint venture between the three seals their solidarity.
SpectrumCo LLC is a comapny owned jointly by the three companies. Comcast owns 52%, Time-Warner and Cox own smaller shares (along with smaller player Bright House Networks, owned by media conglomerate Advance/Newhouse.. The joint venture, in combination with Sprint Nextel, is in the news as its has made what is seen as a winning bid of $2,3 billion for 132 FCC cell phone spectrum licenses, allowing it to own air coverage for 89% of the American population. Once confirmed, that will allow the company to operate a cell phone company to rivals Cingular and Verizon Wireless.
We've pointed out the race between the phone companies and the cable companies to offer quad play service (landlines, cell, TV, and Internet access). This move will put the cable companies at a big advantage.
SpectrumCo will make use of Sprint's national system over the next few years as it builds its own. Sprint is not, unlike Verizon and Cingular/AT&T, a serious contender in the quad play race. It is however considering building a national Wi-Max (wireless Internet) system.
According to a Red Herring article ('Cable Goes on Spectrum Spree", 8/28/06), the exact relationship between Sprint and the cable companies is not very well spelled out.
Analysts are genuinely confused as to why the cable companies, which signed a deal with Sprint to sell the carrier's wireless services as part of a grand slam of services ? data, voice, TV, and wireless ? need the advanced wireless services (AWS) spectrum.
Other big bidders at the auction are T-Mobile, making a big grab to increase its US presence and Verizon Wireless. Also aggressive were MetroPCS and Leap Wireless, regional service providers, who added to their networks. The prices were higher than expected and will add $15 billion to the treasury.
Naturally, cable companies do not compete directly once they have staked out their local monopolies. Still, if they are busy discussing phone spectrum, might they not have an ability to bring up many other issues (especially rates for consumers and the fees for carrying networks and other servcies) that would be anti-competitive.. There may be a theoretical firewall between these operations, but it would be natural that such a firewall would have a few holes for friendly enemies.
5:59:59 PM 
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