While Comcast and Charter each dominate their various major markets for cable and internet service, neither has the national footprint that would help them sell wireless plans to the coming generation that doesn’t want to be tied to a cable or fiber line. So the nation’s two largest broadband providers have agreed to work together on ways they can help each other out in the mobile world.
In official corporate language, Comcast and Charter have agreed “to explore operational efficiencies to speed entry into the wireless market.”
We’ve already heard a fair amount about Comcast’s plans for a mobile service, slated to launch to existing Comcast customers in a few weeks or months. Charter hasn’t unveiled any details about a big wireless push yet, but has said in the past that it has plans for a mobile product sometime in 2018.
Both companies have struck separate deals with Verizon — called mobile virtual network operator, or MVNO, agreements — to be able to use its LTE network and cellular infrastructure for wireless services. But Comcast’s plan is all about maximizing WiFi and putting all of those hotspots they’ve put in customers’ homes to some use.
Now it seems the plan is for them to share the burden of the work to create WiFi heavy new mobile services with Charter, and to make them cross-compatible and usable on each other’s networks. The areas covered by the agreement include: creating “common operating platforms,” unifying technical specs, making sure devices work across both networks, and “emerging wireless technology platforms,” probably a reference to future-looking 5G networks.
That solves one of the key challenges with Comcast’s earlier announcement, which was that it was only going to be offered within the existing Comcast footprint. While the company is huge, it is not universal. A customer traveling from Boston to Washington, D.C. would pop in and out of Comcast country along her way down the East Coast, for example — but she’d travel through Charter territory, so if the two are cooperating then her coverage would be continuous.
The companies say that their goal is to provide “more choice, innovative products and competitive prices for customers in each of their respective footprints. Both CEOs, of course, gave glowing statements about the marvelous potential for their subscribers and their companies to benefit from this deal.
But what lies underneath shows how a few very large companies dominate the entire internet service landscape — because that’s what mobile is, now, portable internet — and how they continue to get bigger without actually competing against each other.
The official announcement describes the companies as “regional cable operators” which, in a sense, is true. The two have no geographical overlap, because the history of cable is a history of exclusive, monopolistic local franchise licenses that have persisted into our internet era.
Between them, however, Charter and Comcast completely dominate the national market for fixed (home) internet service. Charter has finished its acquisition of Time Warner Cable and Bright House Networks, and now boasts about 25 million customers, give or take a few million. That’s in line with Comcast, which has about the same. So in total, the two companies reach between 45 and 50 million subscribers stretching from coast to coast across the whole middle of the country, too. They really don’t have competition on any meaningful scale, and they don’t compete with each other.
Mobile, on the other hand is genuinely competitive; we’ll happily grant that. The wireless space has four big national carriers — Verizon, AT&T, T-Mobile, and Sprint — plus dozens of smaller, lower-cost, niche, or regional carriers that can piggyback off of the big guys’ infrastructure. If Charter and Comcast want to hop in, well, it’s no wonder they want to team up for economies of scale — they’re starting well behind.
But the business isn’t siloed; “cable” and “mobile” are increasingly no longer separate entities.
Comcast is explicitly launching its business as a bundle, seeking to get internet or double-play customers who may not be into the whole landline thing to pick up a wireless line from them, instead. It seems Charter’s goal will be similar… and in the current political environment, regulators are unlikely to mind big companies getting bigger, no matter how anti-competitive the incentives they offer.