The FCC approved Charter Communications' (NASDAQ: CHTR) blockbuster acquisition of fellow cable operators Time Warner Cable (NYSE: TWC) and Bright House Networks this week, and in its lengthy filing approving the deal the agency acknowledged that the companies may well pursue some kind of wireless strategy, including possibly launching an MVNO service. The FCC also offered a glimpse into the plans by Charter, TWC and Bright House to expand their public Wi-Fi networks, and how that effort could create challenges for the nation's wireless network operators.
Charter, TWC and Bright House "contend that the transaction would enable New Charter to be a new entrant in the mobile wireless market by offering mobile products through increased WiFi deployment, the deployment of licensed spectrum or a mobile virtual network operator (MVNO) arrangement -- and likely through some combination of these," the FCC noted in its filing approving the companies' three-way merger, which is valued at around $66 billion. As Variety notes, the transaction would create the nation's second-largest cable operator with 24 million customers, and it now only requires regulatory approval from the California Public Utilities Commission. The CPUC is expected to vote on the transaction this week, and the deal could officially close within the next few days.
While the "New Charter" combination of Charter, TWC and Bright House could well enter the wireless market as an MVNO, the companies haven't specifically promised to launch an MVNO offering if the merger closes. The FCC in its report said only that Charter could pursue an MVNO offering regardless of the transaction.
"I don't believe Charter, or Brighthouse/TWC have decided whether to embark on an MVNO," said Mark Lowenstein, managing director of Mobile Ecosystem and a FierceWireless contributor. "I believe as far as an MVNO is concerned, the cable companies are working independently on these initiatives, and are not all in the same place."
For its part, Comcast late last year said it will execute on its MVNO deal with Verizon, and may test some sort of wireless offering this year.
To be clear, Charter has made no secret of its interest in the wireless market, and has argued that its acquisition of TWC and Bright House would give it a better chance to compete in the space. As part of the acquisition proposal it filed last year, Charter pledged to build 300,000 public Wi-Fi hotspots within four years of the closing of the transaction.
And in the FCC's report issued this week approving Charter's purchase of TWC and Bright House, the agency said that all three companies already appear to be making significant strides in out building a public Wi-Fi strategy. Specifically, the agency noted that "the record shows that the Applicants have deployed WiFi networks and plan to continue deployment of additional WiFi access points even in the absence of the transaction."
Already Bright House has deployed 53,000 publicly available Wi-Fi access points "mounted either at outdoor locations or indoors at the premises of small-to-medium businesses," the FCC said. The agency added that "internal company documents show that Time Warner Cable's WiFi access points are being widely accessed by consumers," though the agency did not reveal the number of TWC's public Wi-Fi hotspots. Both Bright House and TWC are members of the Cable WiFi alliance, a group formed by several cable operators in 2012 to support roaming among their respective public Wi-Fi hotspots
And as for Charter, the FCC said the company already operates an undisclosed number of out-of-home Wi-Fi hotspots in small- and medium-sized business locations in the St. Louis market. "Additional record evidence also suggests that the WiFi expansion Charter claims as a benefit of the transaction is already a part of Charter's existing business plan," the FCC said. "While not currently a member of the Cable WiFi alliance, Charter is pursuing membership, irrespective of the transaction."
"As for Charter, they have been publicly non-committal [on the public Wi-Fi market], although I expect the New Charter will take a close look at its WiFi strategy once the deal closes," Lowenstein said.
- see this FCC filing
- see this FierceCable article
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