Comcast executives say they are ready to purchase spectrum in an upcoming auction if the price is right, potentially setting the stage for the nation’s largest cable company to offer mobile broadband.
The Federal Communications Commission has scheduled the auction to begin on March 29. It will transfer spectrum licenses in the 600MHz range from broadcast TV to wireless service. The chance to buy low-band spectrum is seen as a golden opportunity for T-Mobile USA and other smaller carriers to improve their networks and compete more effectively against AT&T and Verizon Wireless.
But it also offers potential for companies that aren’t currently wireless carriers, like Comcast.
Comcast CFO Mike Cavanagh said in an earnings call yesterday that the company “will be filing to participate in the upcoming forward spectrum auction.” However, Cavanagh noted the company will only buy airwave licenses “if we think the price is right after we do our evaluation of what’s available.” The transcript is here.
Comcast could benefit from rules designed to keep the prices down for everyone except the biggest carriers. The FCC plans to set aside some of the available spectrum for companies with few spectrum holdings in order to boost competition and prevent AT&T and Verizon from dominating the auction.
Last year’s rumor that Comcast was trying to buy T-Mobile seems to have been false, but there were other solid indications that Comcast is looking to expand into mobile service. Comcast struck a deal with Verizon allowing it to resell Verizon Wireless service in 2012, and last year reportedly the company was getting close to starting a wireless service that used both Verizon’s cellular network and Comcast’s large network of Wi-Fi hotspots.
Comcast CEO Brian Roberts discussed the potential of cellular spectrum and Wi-Fi in yesterday’s earnings call. “Our definition of broadband is totally different today than it was five years ago for what you get as a consumer, and I think that goes back into whether we can do something creative in the future, whether that’s involving spectrum or Wi-Fi or some of the existing relationships we’ve got.”
Roberts said Comcast still isn’t sure whether it will buy spectrum, but the company has to file with the FCC in order to keep the possibility on the table.
“It’s a free option, if you will, to get a paddle and see what the values are and how much capacity,” Roberts said. “It’s a very complicated auction, as you know. It’s not clear exactly what’s for sale and exactly yet and all that has to be determined, but you have to make this decision now and so we’re making it.”
Comcast Cable CEO Neil Smit discussed Comcast’s potential participation in the auction in the context of its existing services and customer base. Comcast has “very valuable assets in the mobile space, 28 million customer relationships, 13.3 million [Wi-Fi] hotspots,” he said. “So they are assets that we want to leverage and we’re testing and learning.”