Cable knows how to make a friend a public enemy

Jim Barthold

In the book Public Enemies, Bryan Burroughs explains how J. Edgar Hoover and the FBI turned Ma Barker from an illiterate backwoodswoman and son of Depression-era criminals into a criminal mastermind. The deed was accomplished after the FBI killed the old woman and her son Freddie in a gun battle in which a reported 1,500 rounds were pumped into a farmhouse where the pair were hiding.

I was reminded of this recently when the nastiness swirling about Clearwire hit yet another spike with an analyst's report that the company is hurting and doomed. Hurting everyone knew; executives have been leaving faster than basic cable subscribers and the company has been searching for money like a hog rooting for truffles. Doomed? Well, that's certainly not a given ... yet. It's quite possible, though, that Clearwire never had a chance from the moment it decided it needed the money and backing of three cable companies: Comcast, Time Warner Cable and Bright House Networks.

Cable, as even the most lightweight historian will tell you, does not play well with others. Cable's modus operandi is either acquire what it's lacking or partner with someone who knows how to do it, learn what that partner knows and take over the business.

It worked well with @Home, the world's first foray into high-speed Internet. In the beginning it wasn't Comcast, Time Warner Cable, Cox or any other cable company that brought broadband data into the home; it was @Home. You got an @Home kit; an @Home rep working for the cable operator came to your house; and you had an @Home home page.

The cable guys sat back, watched and learned and, when the time was right, fired something short of 1,500 rounds into the @Home headquarters, taking over the business for themselves and in the process painting the company as rife with inability to deliver a truly inspiring broadband experience. Some of the rumors about @Home at the time would have made Ma Barker blush and ol' J. Edgar sneer.

Now it's Clearwire's turn. While some see Clearwire as a Sprint play--the evolution of Pivot, another failed partnership with cable--the cable guys have seen it as their introduction to mobile wireless. Interestingly, Cox, which was part of Pivot, took no part of Clearwire and is now the most active of all the cable operators in the mobile wireless space. The others are talking up WiFi and home networks and talking down mobile wireless.

Back in 2008, when Clearwire was formed, Comcast Chairman-CEO Brian Roberts said there was "no opportunity out there quite as elegant." Most recently, Roberts' statements have tended toward a lack of support for the wireless service or silence, and CFO Michael Angelakis in September laid out the MSO's Clearwire strategy when he told an investors' conference, "We have no commitment to invest any further (and) I don't think we really intend to invest. I think Clearwire has to figure this out."

If that's not enough to shake your foundations, then you're pretty damned solidly built.

Time Warner Cable Chairman-President-CEO Glenn Britt agreed there's no money in the safe for Clearwire and openly hinted on several occasions that TWC is learning the wireless business.

"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. We're trying different models, different products what have you (and) to date our results are not very impressive and pretty inconclusive," Britt said earlier this year.

It's not as if Clearwire and Sprint weren't warned when they formed this joint partnership. Pivot proved a perfect model of non-cooperation wrapped in technicalities wrapped further in distrust that had no chance of even slightly turning, let alone pivoting. And, if they wanted to look back further, there was cable's Ma Barker, @Home, an idea that went from brilliant to awful to cable-controlled in just a few years.

Some fingers have pointed at Clearwire as a loser in the 4G fight but that's hindsight since Clearwire was first out of the gate with WiMAX. Some have pointed to its infrastructure needs but those were supposed to be supplied by its partners. And some, most recently, have pointed to a lack of direction. From whom?

Clearwire can still avoid being the wireless Ma Barker, killed in a rain of hot lead. But to think that it will be the cable industry that steps in and calls for the ceasefire would be like thinking Ma Barker was a criminal mastermind.

* * *

On a personal note, I finally got to taste Internet TV this weekend when my DirecTV link was no longer direct to my TV and I was forced to use my Comcast broadband connection and my desktop computer to watch my alma mater (Temple) be worn down in double overtime by San Diego State in the NCAA tournament.

Not bad, but the best part was the advertisement in the middle of the game asking how I liked watching the game on that little screen and inviting me to some bar for a better atmosphere with big screens and food. Now that's targeted advertising.--Jim