Tech Talk: Cable Companies Are Stumbling Into Wireless

The wireless market is crowded. There is simply no question about it. No matter where you look, in almost any semi-developed country, you'll find major competition in the wireless scene. Likewise, competition mostly blooms in the cable scene, marred by relatively few local monopolies. The larger cable companies out there, like the larger wireless providers, tend to stretch across the entire nation, providing coverage to huge swaths of the population. Recently, a trend toward convergence has been taking root in the two industries. Verizon has long been a provider of both home and mobile services, while AT&T recently scooped up DIRECTV and even offered customers unlimited data to sign up across services. This could be viewed as wireless carriers getting too big for their breeches and trying to box out the cable companies if it weren't for the fact that the reverse is also happening, though the process is still very early on.

Any wireless network requires an absurd amount of setup, using an absurd amount of resources, before it's ready for any kind of commercial use. Even when it comes to cable providers, it's quite hard to imagine a wireless network without traditional cellular signals. Cable companies, as it turns out, seem to want no part in such a process, and quite a process it is. Getting set up would require getting your hands on wireless spectrum, setting it up to only be usable for wireless networking, then installing relevant equipment across your service area. Rather than having to convert their home services to work on limited and costly cellular networks, cable companies have been simply signing deals with carriers to become MVNOs, or mobile virtual network operators, which is basically exactly what it says on the tin. With the terms of their contracts dictating their access rights to the carriers' networks, cable companies will use them as a backbone for wireless service. Comcast, for example, recently signed such a deal with Verizon.

Instead of the traditional cellular-first approach, cable companies seem poised to mimic smaller MVNOs like Republic Wireless and FreedomPop in offering a Wi-Fi first service, prioritizing Wi-Fi connections over cellular and throwing customers onto them whenever possible. Rather than the traditional costly cellular buildout, this would require cable providers to build their networks from chains of Wi-Fi access points. While cable companies may have the expertise, networks and equipment to build out networks full of Wi-Fi coverage, that doesn't mean it won't require oodles of money, manpower and, most of all, time. They will be, after all, building out Wi-Fi to bolster their network to the point that cellular access becomes a backup. That's not even considering the fact that the way Wi-Fi access points work by nature is not conducive to a massive amount of users in a given area, requiring potentially hundreds of hotspots in some more crowded areas, and software to shift users around on them seamlessly.

Some, however, are not taking the easy way out. Comcast, after their aforementioned deal with Verizon, is not planning to solely piggyback off of their new contract. Instead, they're planning on building out a 5G cellular network, skipping over the roadblocks, maintenance and cost associated with building a normal network for current consumer use, instead leaving that to Verizon and their own network of Wi-Fi networks. Through their recent acquisition of Time Warner, Charter Communications is likewise in cahoots with Verizon and planning to build out a 5G network. With 5G's limited ability to pierce buildings and obstacles, as well as its relatively short distance and lower capacity of users per node, while overlap between providers is highly likely, it will wind up being mostly meaningless unless all of the major players end up in contracts with one another. Providers will have to build small, tightly knit networks of 5G nodes in order to build out a comprehensive network, which will require permits, labor, equipment and, again, time.

On top of all of that, the FCC's 600MHz spectrum auction is in initial stages and vital spectrum for wireless buildout will be making itself available in the very near future, presenting the opportunity for newcomers with deep pockets to buy up spectrum and potentially build out networks to rival the major carriers in the coming years. In essence, if there was ever a time for brand new blood to hit the market and have the tools available to compete with the Big 4 in the United States, it's now, and cable companies know it.

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