Wireless partnership sign of future

COURTESY COX COMMUNICATIONS
OPEN LINES: Providence Mayor Angel Taveras, center, at the recent grand-opening celebration for Cox's new store in Providence. Cox recently entered into a partnership with Verizon allowing wireless phone service to be included in each other's packages.
COURTESY COX COMMUNICATIONS OPEN LINES: Providence Mayor Angel Taveras, center, at the recent grand-opening celebration for Cox's new store in Providence. Cox recently entered into a partnership with Verizon allowing wireless phone service to be included in each other's packages.

As business ventures go, Cox Communications’ foray into the competitive wireless-phone market was a short one.
Just six months after the Ocean State’s dominant cable television and Internet provider launched its wireless service here, the company announced in November that it would be getting out of the mobile-phone game because of a “lack of scale” to compete.
As sudden as it was, Cox’s rapid exit from the mobile-phone arena was far from unusual in the now rapidly consolidating wireless market.
The company’s decision last month to sell the wireless-spectrum licenses that it had been building a network on to telecommunications giant Verizon followed similar moves from fellow cable providers Comcast, Time Warner and Bright House Networks.
Indeed, the smartphone and mobile-computing explosion of the past few years has accelerated a move toward wireless consolidation as the leading providers, of which Verizon is the largest, race to build larger and faster networks to meet the demand of data-hungry consumers.
What is different about Cox, and the other cable companies, selling wireless spectrum to Verizon is that for years the cable and phone industries have been viewed as rivals fighting for control of future electronic media distribution.
And not only have Cox, Comcast and Time Warner sold spectrum to Verizon, they have each entered partnerships with the telecom company that will allow wireless phone service to be included in cable packages and cable television in wireless-phone packages.
In addition, the companies have agreed to form an “innovation-technology joint venture to better integrate wireline and wireless products and services,” they announced in a joint press release Dec. 16.
According to telecommunications-industry analyst Ross Rubin at market-research firm NPD Group, although telecom and television historically have been competitors, their markets are distinct enough to make cooperation beneficial, especially since Verizon’s recent decision not to expand its FiOS network beyond areas already slated for service.
“They are competitors, but competitors with very different dynamics,” Rubin said. “With Verizon deciding not to further pursue building-out FiOS into new markets, that helps open the door for more collaboration with cable companies. With this additional spectrum, Verizon can build out more robust 4G offerings and better coverage and the cable companies can take advantage of it whenever possible.” While the details of Verizon’s partnership with Cox and the other cable companies have not been released yet, the agreement certainly points toward the further merging of television, Internet and phone service as all media becomes increasingly mobile.
The spectrum Cox sold was in the 700 mhz frequency range which used to be used for broadcast television and is now an area where Verizon is expanding its new 4G LTE network.
Cox has been operating on Sprint’s 3G network while it built infrastructure to start its own network, but now can take advantage of Verizon’s system as broadcast spectrum.
In addition to the network issues, Cox and other smaller wireless providers had not been able to get access to the premier mobile smartphones like the iPhone or the higher-end Android phones, which Verizon has.
As for what the deal could mean for cable and phone customers locally, the first result will be that anyone with Cox mobile-phone service will need to find another carrier before the old system shuts off March 30.
To do this and compensate them for the inevitable fees involved, Cox has agreed to pay customers $150 for each phone line disconnected.
As for how many people actually signed up for the service, privately held Cox would not say. The company never offered wireless to business customers.
Eventually, Cox customers should be able to buy Verizon wireless service through Cox, but that might not be available by the end of March.
The Cox-Verizon spectrum sale, for $315 million, still needs to be approved by the Federal Communications Commission, which last year scuttled AT&T’s proposed purchase of T-Mobile.
Going forward, customers in Rhode Island and elsewhere may see fewer competitors battling each other in the traditional cable and telephone arenas if the current pace of consolidation continues, although new technology could always upend that.
Cox’s deal with Verizon would appear to be a blow to Sprint, which is the third-largest mobile carrier behind Verizon and AT&T, and loses the potential connection to the cable company’s customers, but Rubin said he is not so sure.
“It is probably too early to tell for Sprint,” Rubin said. “The AT&T/T-Mobile merger that was called off was probably the biggest threat to Sprint. Sprint is looking at a lot of different options now as it looks to launch LTE starting in 2012.” •

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