Comcast, Liberty Global Create Trans-Atlantic Wi-Fi Hotspot Network

Comcast Cable and Liberty Global will allow their customers to use each other’s Wi-Fi networks by 2015. The immediate upside is higher value for each firm’s high speed access services, allowing no-charge roaming.

On one hand, the deal merely extends the reciprocal roaming privileges cable operators have offered each other in the U.S. market, for example, adding more value to each operator’s fixed network high speed service.

Since 2012, Bright House Networks, Cablevision, Comcast, Cox Communications, and Time Warner Cable have allowed Wi-Fi hotspot access to each other's broadband customers.

The "CableWiFi" initiative initially provided access to more than 50,000 hotspots around the United States. The new deal adds a significant amount of roaming for travelers in parts of the United States and Europe.

On the other hand, the deal creates a wider footprint for other future services, as well. Comcast has publicly said its massive Wi-Fi hotspot network simply is a way to add value for its high speed access customers.

But Liberty Global has been more open, clearly saying that Wi-Fi can, at the very least, reduce the cost of providing mobile services, when cable operators lease capacity from mobile wholesalers.

At the same time, a dense Wi-Fi network creates a wholesale opportunity as well. Other service providers (fixed and mobile) might lease access to bolster their core networks.

Consider that mobile service providers are talking about, and investing in, small cell networks that functionally provide similar advantages to Wi-Fi hotspot networks, often integrating Wi-Fi at the same time.

The point is that a widespread Wi-Fi hotspot network already plays an important role in supporting mobile Internet access, and should be more important in the future for cable operators, mobile service providers and other ISPs.

Illiad’s Free Mobile, for example, uses Wi-Fi hotspots to decrease the cost of access service supporting its mobile phone services, connecting users using Wi-Fi first, and then defaulting to the mobile network only when Wi-Fi cannot be used.

Dense  Wi-Fi networks of the sort both Comcast and Liberty Global are building will provide a foundation for doing the same thing, eventually.

Perhaps significantly, Tom Nagel, Comcast SVP touts the deal as “wireless broadband service.”

Comcast has more than three million Xfinity WiFi hotspots active in the United States, while Liberty Global has more than 2.5 million “Wi-Free” and “WifiSpots” access points in Europe.

The question is how big a force Liberty Global and Comcast eventually will be in the mobile business.

Eventually, most suspect, market structure in Europe and the United States will likely include both companies among the leading four or five providers.