JUST HOW MUCH do you want to do with a cellphone?
Four leading cable TV operators and Sprint Nextel, the third-largest U.S. mobile phone company, agreed this week to develop a package of phone and video services loaded with geek appeal. Among other things, customers will be able to use the screen on their mobile phone to watch shows stored in their cable boxes.
This marriage of phone and cable is bound to make gadget lovers salivate, even if it leaves average TV viewers scratching their heads. But video on a cellphone is hardly the main purpose of the deal, nor is it the real benefit for the public.
Through the joint venture with Sprint Nextel, the cable operators are girding themselves to battle powerhouse local phone companies such as Verizon and SBC. The cable operators are rolling out local phone service, and Verizon and SBC are readying their networks to carry TV signals. Within a few years, both sides will be able to offer phone, Internet, wireless and video services.
This vision has been reshaping the telecom industry ever since Congress passed the Telecommunications Act of 1996, a law designed to spur competition in phone and cable TV services. The measure hasn't yielded the results its backers predicted. Instead, a wave of consolidation in the industry has left fewer players on the field.
Sprint Nextel's deal with Comcast, Time Warner Cable, Cox Communications and Advance/Newhouse Communications, on the other hand, is a sign that the preliminary maneuvers are coming to an end. The cable operators and Sprint are expected to start offering at least some of their customers the full bundle of services sometime next year, raising the pressure on the local phone companies to reply in kind. Voila, more competition.
Cable companies already are offering phone service in some parts of the country, as Cox has been doing in Orange County. The Sprint Nextel deal, which has been in the works for months, should take that competition to a new level -- not just by increasing the number of services offered but by ratcheting up the innovation.
What the venture ultimately produces remains to be seen. The cable companies, after all, are notoriously slow to introduce anything new. Still, the looming competition with phone companies is likely to push Sprint Nextel and its partners to deliver services that their customers cannot get today. And that innovation will be a welcome benefit, regardless of whether you want to watch it on your cellphone.