Comcast to File to Be Potential Bidder on U.S. Airwavesby
Auction of wireless spectrum slated for spring at FCC
Cable operator may enter market dominated by Verizon, AT&T
Comcast Corp., the largest U.S. cable operator, will be a potential bidder for wireless airwaves in an auction this spring, inching closer to entering a market dominated by Verizon Communications Inc. and AT&T Inc.
“We’re going to evaluate, consider and may purchase (airwaves) but only if we think the price is right after we do our evaluation of what’s available,” Chief Financial Officer Mike Cavanagh said on a conference call Wednesday.
Acquiring airwaves would significantly boost Comcast’s wireless ambitions by making it easier for the company to build its own network. That would go beyond the company’s current plans to test a hybrid cellular and Wi-Fi service using Verizon’s network and the company’s millions of Wi-Fi hotspots.
If Comcast wins airwaves, Verizon and AT&T -- the top two U.S. wireless carriers -- would have a much stronger wireless competitor even as they face competitive pressure from smaller rivals like T-Mobile US Inc.
During an earnings call Wednesday, Cavanagh said the company’s $5 billion in planned 2016 stock buybacks won’t be reduced if the company acquires spectrum at the auction, which is slated to begin this spring at the Federal Communications Commission.
As part of the auction, TV stations will voluntarily sale airwaves in return for cash. Then Comcast and wireless companies will consider buying that spectrum, ideal for delivering video through walls and windows.
Comcast is studying technology that would let customers switch between Wi-Fi hot spots and cellular networks without losing connectivity. Over the past several years, Comcast has been replacing its cable customers’ routers with new ones doubling as public Wi-Fi hotspots. To date, the company has installed about 13 million hot spots.
Comcast’s decision to participate in the auction wasn’t a surprise and “it is by no means certain that they will be significant buyers,” said Craig Moffett, an analyst at MoffettNathanson. “Eventually, Comcast will be in the wireless business one way or the other. The only questions have been how and how soon?”
Cable companies have tried before to add wireless to make a quadruple play with TV, Internet and digital phone services. One of the first attempts was a partnership between Sprint Corp. and a group of cable companies including Comcast, Time Warner Cable Inc. and Cox Communications Inc. That project, called Pivot, shuttered after two years.
Cablevision Systems Corp. unveiled a low-cost mobile phone service in January, but that service, called Freewheel, only works when customers are connected to Wi-Fi hotspots.