It might soon be possible to conclude that the most-significant fruit of the Telecom Act of 1996, which legalized competition in the U.S. local telephone business, was the emergence of cable TV as a facilities-based supplier of competition for incumbent local exchange carriers (“telcos”).
While the Telecom Act also underpins the ability of efforts such as Google Fiber and other independent Internet service providers, it is the cable TV industry (especially Comcast and Charter Communications, which now has emerged as the Verizon and AT&T of the cable TV segment) that represents the main challenge to telco providers.
The last remaining support for that thesis is cable TV’s entry into the top ranks of the mobile business. But that will come, and likely in the form of a Comcast acquisition of T-Mobile US, argues Tim Horan, Oppenheimer analyst.
Sprint and Dish Network would be the wild cards, in that event. Many have speculated that Dish Network ultimately would sell its spectrum, with Verizon being the most logical buyer.
That would still leave Dish Network with a basically untenable future, leading to a sale. If Dish Network really decides to make a go of the mobile business, and if T-Mobile US were a part of Comcast, it might decide to source wholesale capacity from either Sprint or Verizon, in an effort to build a branded mobile business.
Some of us cannot see a long term independent future for Sprint, either, so one way or the other, another provider could enter the top ranks of the U.S. mobile business.
Telco entry into entertainment video, one might argue, has had, and will have, far less impact on the overall communications business, even if, by mid-1998, the old Ameritech had gotten video franchises in some 75 communities and the old BellSouth had gotten video franchises in 18 or so markets. GTE, meanwhile, also had entered the video business.
The telco move into video had begun, on a national scale, as early as 1993, the year that Bell Atlantic and TCI almost merged.
Most have forgotten that AT&T once owned Tele-Communications Inc., then the largest U.S. cable TV company. TCI executives at the time (1998) argued that the new firm would “redefine the telecommunications industry.”
So perhaps you can say cable executives were right about the redefinition, just not the role of AT&T as an owner of TCI assets.
Once Comcast enters the mobile business, the transformation will be complete. The leading cable TV and telco entities will compete, on a facilities basis, across the full range of services sold to consumers and businesses, though the relative revenue and market shares in various product lines will remain unequal.