The Time Warner Deal: Big Cable Is Coming for Big Wireless

The Charter-Time Warner Cable deal could result in some new competition in another arena dominated by a small number of companies that wield immense power: wireless. Cable companies and wireless companies haven’t traditionally infringed on each other’s territory. The cable industry has focused on pay television; the wireless industry was all about phone calls. Today the main business of both industries is selling access to the Internet.

Cable companies are developing their own wireless services in which people spend most of their time connected to Wi-Fi networks and fall back on cellular service to fill the gaps. Doing this requires some access to cellular spectrum. Both Comcast and Time Warner Cable sold Verizon their rights to wireless spectrum in a $3.6 billion deal in 2011 but maintained the ability to access Verizon’s network for their own services. Verizon was largely seen to have gotten a sweetheart deal at the time, says Jonathan Chaplin, an analyst at New Street Research. But he doesn’t think Verizon would strike a similar deal today. “Nobody was talking about Wi-Fi-first wireless models,” he says. “Between then and now, though, a couple of these businesses were launched in Europe by cable companies and have been incredibly successful.” One of them, notably, was Telenet, a Belguim-based company owned by Liberty Global. John Malone is chairman of both Liberty Global and Liberty Media, Charter's largest shareholder.