Verizon teams up with cable television via wireless spectrum
Dec 6, 2011 11:45 AM, by Franklin McMahon
Verizon’s announcement this week could lead to big competitors suddenly being partners in providing data services.
It’s pending government approval, but if it flies, it will be very big news. Verizon this week has agreed to acquire wireless spectrum from three separate cable companies for the cost of $3.6 billion. This would allow for extensive expansion by Verizon to expand its wireless data network. The interesting twist is that the larger cable companies — Time Warner Cable, Comcast and Bright House Networks — would now be able to market Verizon services. Hence, Verizon could do the same, leading big competition to suddenly be partners.
This could bring about a world in which all data-intensive services would be contained on one bill, including broadband, cable TV, home digital phone and wireless cell phone. The shift is not unlike the transformation of cable television a decade or two ago. Back then, cable offered television and that was it: It needed approval from the city to move into town and there was no competition, so providers could settle in and make a healthy profit. Then satellite television came into play, and suddenly there was competition from above.
Cable seemed to be old-fashioned, and it was thought that dishes would quickly take over the marketplace. But cable dug in and expanded, offering other options such as phone service and broadband, so now consumers could have one-stop shopping, making things convenient. It kept the dish market at bay and recharged cable into a multiple-billion-dollar business.
This may well happen again as wireless is suddenly added into the mix. Imagine one bill that has pretty much every service you would ever need. The companies are savvy enough to know that united they stand, and with competition heating up from all sides, the more they can offer a customer, the better. Rather than cable companies extending resources and budgets toward developing their own wireless cell phone system, they can leverage the coverage and technology of Verizon, while continuing to focus on what they do best.
It also will be interesting to see how each partner’s devices interact with each other. An iPhone could talk to a cable box directly on the consumer’s own network, home phone service could merge with wireless options, and so on.
It will be an exciting time, and there remains much potential. If all this is approved, the rollout could begin in 2012 and offer customers even more services from one provider. Or rather, two competing providers suddenly working in unison to offer an even bigger all-encompassing package.
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