Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
In a week of playing “Who has the worst weather?” there wasn’t much that could amuse me. Cold weather makes me cranky, so I looked for something to rile me up this week. Options:
• Verizon Wireless pre-sales website hiccups? Worth raising an eyebrow, but turned out to be nothing.
• AT&T’s gloating a bit about it? Worth a smirk.
• A story about Charles Manson on People online because he was busted for the second time in two months for being caught with a cellphone in prison? Definitely disturbing and worst of the week on a number of levels, mainly because I thought People magazine reported on celebrities, but as long as I am not the one he’s calling, it’s not that exciting.
• The madness that is Mobile World Congress has reached fever pitch as 60,000 people try to coordinate 60,000 meetings in a mere five days. That’s crazy but expected crazy, like a Colorado snowstorm in January.
So while I holed up with my trusty space heater and pondered global warming, I came across a group crankier than me: the National Association of Broadcasters. This fine group of do-gooders, the ones that want to include an FM radio in every cellphone to the benefit of – well no one but themselves exactly but that’s a different story — felt it was its civic duty was to inform Congress that Time Warner Cable is hoarding spectrum.
What? Hoarding spectrum, you say? Aren’t there laws against that? We’re in the middle of a spectrum crisis. No one can be hoarding spectrum? I am outraged.
NAB has a reputation as one of the most powerful lobbying groups in Washington. And yet, it took the organization six days to get its letter to Congress up on its website. So I have to wonder if it even believes the legitimacy of its charges. If I thought Time Warner was sitting on its AWS spectrum, hoarding it even, waiting for AT&T to buy it, I would post that story pretty fast. But NAB took the extra time to highlight in yellow a Communications Daily story on Time Warner’s fourth-quarter results that NAB based its hoarding charges on. (Just in case you didn’t follow where the hoarding takes place.)
Turns out, Time Warner lost $50 million in 2010 trying to build out its wireless network, according to its fourth-quarter financials from Seeking Alpha. The cable operator has “almost 15,000 subscribers.” That’s how I would hoard spectrum – spend a ton of money on it to not find a business model that works. Brilliant. I am sure Time Warner is tickled pink to tell its stock holders it spent $50 MILLION and has no conclusive results about what its customers want.)
So here’s what was actually took place: An analyst asked about TWC’s thinking of Clearwire Corp. and its own AWS spectrum. CEO Glenn Britt sounded pretty cranky himself talking about TWC’s wireless plans. “We are basically exploring whether packaging wireless data with our wireline offerings is something that consumers want and if there’s a formula that people want. So we’re trying different models, different products, what have you. And to date, I would say our results are not very impressive and pretty inconclusive. So we’re going to stick with that for a while. We’re trying to spend not too much money while we’re doing it. So that’s basically what we’re up to.”
Then the CFO spoke up, trying to sound less cranky. (Hey, we’ve spent $50 million on 15,000 subscribers so perhaps you math people might find that spending $3,333 to get each subscriber might look bad on paper, but the real asset is the value of the spectrum.) Wireless carriers brag about the value of the spectrum every time they make a dumb move.
And, by the way, Time Warner expects to lose $75 million on wireless, home security and other new businesses this year. Now while I heard “frustration,” gobs of frustration, NAB heard “hoarding.” Potato, potato.
I understand why Time Warner is cranky, but why is NAB cranky? This is Super Bowl time, when companies spend $3 million on a 30-second advertisement. That would be happy time at my house. Is it that NAB is not over the digital transition, when they had to give up spectrum they weren’t using? Is it that they still have more spectrum than they are using so they are being asked (politely it seems to me) to get paid for spectrum they aren’t using and never paid for? Again, that would be happy time at my house. (I’ve got a pool table in the basement just like that –we got it for free and we never use it – but I don’t think Craig’s List would be as kind to my pool table as the government is to broadcasters. Why isn’t there an incentive auction for pool tables, I ask?)
So I guess the NAB is just like Mr. Cranky Pants.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–So the other wireless operators need to buy Verizon Wireless a beer. While everyone was glued to VZW pre-sales of the iPhone, J.D. Power and Associates released its customer service survey, which had all of the major operators scoring worse than they did the previous six months.
I welcome your comments. Please send me an e-mail at tford@rcrwireless.com
