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Cable Technology Feature Article

May 25, 2011

Cable - The Long-shot for Sprint's Future Independence

By Doug Mohney, Contributing Editor

Sprint (News - Alert) CEO Dan Hesse has been making the rounds of Capitol Hill and the media, proclaiming doom and gloom for his company if AT&T successfully acquires T-Mobile (News - Alert).   But Sprint may have a strong set of sugar daddies waiting to see what happens: cable.   The MSOs just don’t like the telcos and it would be in their best collective interest to see Sprint remain independent of Verizon (News - Alert).

There’s a lot of good history between the cable companies and Sprint, first with supplying broadband services and leased lines, then moving to VoIP termination and exchange.   Sprint’s wholesale website boasts of “more than 5 million cable telephony subscribers” making it the “market leader” in outsourced cable VoIP services.

When Sprint needed money to build out its WiMAX network, it turned to the cable industry as a big money investor and a reseller, providing a mixture of 3G and 4G services so MSOs could start offering quad play bundles of broadband, TV, Internet, and wireless services.   If Sprint should fall out of the market, the cable industry would face the unpalatable option of having to cut deals with either AT&T or Verizon.

Cable’s dependence on Sprint became tighter when Cox (News - Alert) Communication announced it will stop its independent build of a 3G network, instead using Sprint to offer wireless in more than 50 percent of its footprint by the end of the year. The move, reported by Bloomberg and others, includes the shutdown of Cox’s existing 3G network and putting its wireless customers onto Sprint is an MVNO. Multichannel News notes former Cox VP of Wireless Stephen Bye moved to Sprint Nextel (News - Alert) as VP of Technology, so there’s some interesting unspoken ties between the two companies.

Cox has looked at 4G and LTE, testing the technology in San Diego. It also has more than half a billion dollars in spectrum licenses in regional markets, so there might be a future quid pro quo where Sprint starts deploying LTE and Cox provides use of its spectrum to Sprint for some sort of consideration.

However, the relationship between Sprint and the cable companies is a pragmatic one. The cable industry once used Sprint as its primary clearing house for VoIP traffic, but consultant/troublemaker Richard Shockey says the big boys have moved to direct bi-lateral peering arrangements -- saving them about $250 million a year in termination charges.

If push came to shove, it isn’t clear how deeply cable would intervene to prevent Sprint from being acquired by Verizon, but the cable industry is no doubt making its own rounds on Capitol Hill to quietly prevent AT&T from acquiring T-Mobile and threatening the independence of Sprint.

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Doug Mohney is a contributing editor for TMCnet and a 20-year veteran of the ICT space. To read more of his articles, please visit columnist page.

Edited by Jennifer Russell