What Does Cox's 3G Move Really Mean?

Carl Weinschenk

The news that Cox Communications has launched cell phone service in three markets -- Orange County, Calif., Omaha and Hampton Roads, Va., its traditional training wheels systems-is not a surprise, of course. The operator had announced in 2008 that it would do so, though it seems that the introduction is late.


It's interesting to consider what the move means in the big picture. The cable industry is extremely good at the things it is good at. That started with video, a business it came to dominate and in which it still is the big Kahuna, though satellite and IPTV competition has taken a bit of the bloom off the rose. It made moves into the Internet and wired phone games and has done extremely well.


The two businesses in which the cable industry has had problems are commercial services and cellular. While it has had some success in providing business services, even its biggest supporters wouldn't suggest that the industry has fully exploited its advantages, which include a huge universe of small and medium-sized business prospects willing to listen to its pitch and fiber rings at or near their customer base.


Its cell phone fate has been even grimmer. The Pivot cellular service co-owned by Cox, Comcast, Time Warner and Sprint failed about two-and-a-half years ago. Besides that, there hasn't been a whole lot of action.


The Cox service may give heart to those hoping for a true cable cellular service. If cable cellular blossoms, the industry will be able to boast of offering the quadruple play of wired and cellular voice, video and data. The bundling possibilities of such a stable of services essentially are endless.


There is another thing to recognize about the cable industry, however: It is an industry that does things in lockstep. While the essential pace of service introduction varies between operators based on corporate culture and balance sheets and local conditions, it essentially is an industry that acts in unison. The Cox introduction could be seen as potentially an industry-wide trial balloon and research/marketing trial.


Prospects for work on a meaningful cellular voice play for the cable industry will be much more real when it becomes a priority of CableLabs, the industry research and development consortium. Another big picture item that will flesh out the importance of Cox's project is how aggressive cable operators are as 4G-Long Term Evolution and WiMax-wireless services emerge.


Much valuable marketing and operational information will be collected by Cox in its 3G rollout, and much of it will be applicable in the 4G realm. When the cable industry was readying its push into wired VoIP a decade ago, it used its experience in ongoing legacy phone services to prepare, since the newer service was not ready for prime time. The bottom line is that much of the information that is gathered -- how to process and activate customers, for instance -- is valuable across network types.


Though Cox is not a Clearwire partner-cousins Comcast, Time Warner Cable and Bright House Networks are -- the same intelligence sharing could eventually be a side benefit of the 3G endeavor announced this week.

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