Softbank offers much-needed investment to the still struggling No. 3 U.S. wireless operator. But Dish doesn’t just bring cash; it’s got 4G spectrum and a huge pay TV network to boot. Informa Telecoms & Media Principal Analyst Mike Roberts lays out all of the advantages of a Sprint-Dish marriage:

“First and most importantly, Dish could combine its 2GHz LTE spectrum with the LTE spectrum of Sprint and Clearwire to build one of the strongest LTE spectrum portfolios in US, which would be the foundation for a powerful new competitor in the US telecoms market. Second, using Sprint’s newly-modernized mobile network would give Dish a cost-effective way to deploy LTE in its 2GHz spectrum and meet the FCC’s rollout requirements. Third, if the deal goes ahead, Dish and Sprint could quickly offer TV, broadband and mobile bundles to compete more effectively with larger integrated telecoms players such as Verizon and AT&T.”

In particular, Dish’s spectrum would give Sprint the immediate room it needs to grow its LTE capacity. Sprint’s current LTE network is bit undersized compared to high-capacity 4G networks its competitors are rolling out. While Sprint is planning to buy the remaining stake in Clearwire — which would give it Clearwire’s vast 2.5 GHz holdings — Clearwire is using a different type of LTE technology that could make getting the right consumer devices more difficult. Becoming part of Dish would give it the right kind of licenses to complement Sprint’s current network.

Also, Sprint taking over Clearwire isn’t a given. Several other companies have expressed interest in the 4G operator and its spectrum, and last week Clearwire revealed it just got a new offer from an unnamed entity to acquire its licenses in big cities for between $1 billion and $1.5 billion. The Wall Street Journal pegged that unnamed company as Verizon Wireless.

Given all of the crazy variables in this complex game of spectrum chess, it seems like a Sprint and Dish would form a good match, but the companies haven’t always seen eye-to-eye.

There was once talk of a partnership between the two, using Sprint’s new networks to host Dish’s LTE service. But those talks fizzled, and Sprint and Dish wound up becoming big adversaries, fighting over Clearwire’s future and squabbling about interference issues in their spectrum neighborhood.

Copious amounts of money certainly can heal old wounds, but there’s a question of whether Dish has enough money. Despite Dish’s big war chest, it would still need to go $9 billion further into debt to finance its proposed deal, Stifel Nicolaus analyst Christopher King said in a research note. Dish may have just set off a bidding war, but it might not have the money to see it through. According to King:

“We believe that DISH is more strategically desperate for Sprint than is SoftBank; however, SoftBank certainly has deeper pockets. … As such, we believe SoftBank is in a better position, financially speaking, to match DISH’s offer – or raise the offer further – should it choose to do so. It appears to us that Sprint is in a solid position from a negotiating standpoint.”

If the money’s right, Sprint may not care about any of the strategic advantages of a Dish deal. As with all carriers, Sprint’s foremost concern is spectrum and Sprint may be in a position to acquire better licenses with Softbank’s cash.

Last week, the U.S. Department of Justice advised the Federal Communications Commission to set rules for its forthcoming TV airwaves auction favoring smaller operators like Sprint and T-Mobile over dominant carriers AT&T and Verizon. If FCC does give Sprint an advantage in that auction, it could walk away with some very attractive 600 MHz airwaves without breaking the bank.

Chess photo courtesy of Shutterstock user Elnur

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In just nine months of operation, Free has attracted 4.4 million customers, or 6.4 percent of the country’s mobile market, putting enormous pressures on France’s big three. Orange gained 320,000 customers, SFR gained 40,000 and Bouygues Telecom gained 124,000. Free has achieved that feat by offering dirt-cheap mobile voice and data plans, which it maintains in part by offloading much of its traffic onto the millions of home Wi-Fi access points used by its broadband customers.

Some of Free’s enormous growth, however, can be attributed to its free mobile plan, a baseline 60 minute/60 SMS plan it makes available to Iliad’s 5.27 million residential broadband customers. Free doesn’t seem to have much trouble finding paying customers, though.

Despite the low cost of its plans, Free generated €238 million (US $304 million) in revenues in the third quarter. When you subtract handset sales revenue from that number you get an monthly average revenue per user (ARPU) of roughly €16 per month. That’s a pittance compared to what the typical U.S. carrier brings in each month, but price competition is much steeper in Europe, and Free’s whole business model is based on pushing those prices down even further.

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That would be roughly 4 percent of today’s UK mobile subscription total and about 5 percent of the population. But keep in mind that for much of that two-year period there will be only a single operator offering 4G services.

Everything Everywhere – formed from the UK combination of France Telecom’s Orange and Deutsche Telekom’s T-Mobile – has permission from regulator Ofcom to launch LTE this year using its 1800 MHz 2G spectrum, a luxury most of its competitors don’t have. EE is required to divest 30 MHz of its spectrum, which it will turn over to 3 UK. But it also has a year before it has to close the deal, meaning 3 could have to wait until the end of 2013 to activate its Samsung-built network, according to Wireless Intelligence, which is the analysis arm of the GSM Association.

Meanwhile O2 and Vodafone have to wait until the UK spectrum auctions, which should wrap up in March. That puts EE at significant advantage, a fact that Vodafone has vigorously protested. Consequently, the distribution of those anticipated 3 million subscribers will be weighted heavily toward EE, accounting for 44 percent, or 1.32 million, of those connections, the report found.

According to Wireless Intelligence senior analyst Joss Gillet:

Everything Everywhere is set to benefit from a 12-month head start in the commercialisation of LTE services. Its success will depend on its network coverage plans, as well as its portfolio of devices and service tariffs. TeliaSonera launched the world’s first LTE networks in Sweden and Norway in late 2009. But despite this first-mover advantage, the operator’s early LTE adoption was dampened by a lack of compelling LTE devices, expensive tariffs and limited network coverage. However, EE may avoid many of these problems as the global LTE market has evolved rapidly over the last two years, with innovative pricing structures and the increasing availability of attractive smartphone models. EE’s focus at launch will be on LTE-enabled dongles and (possibly) tablets compatible with its 1.8 GHz band – with LTE smartphones likely to arrive either late this year or in early 2013.

Interestingly, Gillet expects UK operators to adopt different 4G pricing models than US operators. While Verizon Wireless, AT&T and Sprint are charging the same rates for LTE data as they are for 3G, their UK counterparts will charge premium rates for the additional speed, Gillet said. For instance a subscriber on a 10 GB 3G plan would pay €15 (US $18.75) more a month for the same data bucket.

LTE image courtesy of Shutterstock user Inq

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The new deal will see licenses in 218 markets change hands, the balance going to T-Mobile, which will pay Verizon an undisclosed sum of cash. In all, T-Mobile will gain licenses covering 60 million people, and, most importantly, T-Mo will be able to fill critical gaps in its future LTE network. Though T-Mobile gained a lot of Advanced Wireless Services (AWS) airwaves after its merger with AT&T failed, it still has the frequency holdings to only partially cover the country. For instance its original plans called for covering only three-quarters of the top 25 markets with the new LTE network.

The deal with Verizon can fill in those holes, giving it spectrum in Philadelphia; Washington, D.C.; Detroit; Minneapolis; Seattle; Cleveland; Columbus, Ohio; Milwaukee; Charlotte, N.C.; Raleigh-Durham, N.C.; Greensboro, N.C.; Memphis, Tenn.; and Rochester, N.Y., among other markets. In exchange, Verizon would receive licenses covering 22 million people.

It’s no coincidence that most of the licenses T-Mobile gains are east of the Mississippi. Verizon already has AWS holdings in the eastern half of the U.S., and the cable deal will only make it more flush in east coast airwaves. Meanwhile, T-Mobile’s received a lot of west coast airwaves from AT&T.

So why the change of heart from T-Mobile? It’s probably acknowledging reality. T-Mobile has been angling for those cable airwaves all along, which is why it has called for the Verizon-cable deal’s dissolution on anti-competitive grounds. But it likely realizes it has little chance of stopping the deal from going forward, so T-Mobile might as well deal directly with the airwaves’ eventual owner. You also could take the more cynical view that Verizon is simply buying a very vocal critic’s silence with some extraneous spectrum.

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Verizon is trying to buy the cable operators’ Advanced Wireless Service licenses, which would give it a near nationwide footprint of airwaves for an LTE overlay to complement its current 4G network at 700 MHz. To sweeten the pot and gain regulators’ permission for the buy, Verizon has offered to sell off its spare airwaves in the 700 MHz band to other operators.

Carriers like T-Mobile and Sprint, along with a slew of consumer advocacy and telecom industry groups, have criticized the deal, claiming Verizon is merely trying to lock up the most valuable 4G airwaves in the market in order to keep them out of its competitors hands. The implication here is that Verizon locked down the A and B blocks, and now that much more valuable AWS frequencies are in play, it will do the same with the cable operators’ licenses.

In the letter (pdf), Kaplan points out that under the terms of the 700 MHz auction Verizon is required to build networks in the A and B blocks by no latter than June of 2013, yet it appears to have done nothing with those licenses. He asks:

“…what steps to date, if any, has Verizon Wireless taken to deploy mobile services using the Lower 700 MHz A of B block licenses (either or both)? On what timetable has Verizon Wireless been planning to deploy mobile service in these Lower 700 MHz blocks?”

Kaplan also wanted to know why the sale of those 700 MHz licenses was contingent on it grabbing the cable AWS spectrum. The FCC wants to how that’s relevant, if Verizon had tried to sell its extra 700 MHz licenses in the past, and whether Verizon truly plans to abandon the spectrum sale if the cable deal isn’t approved. Kaplan wants answers next Tuesday.

Verizon is in a tricky situation here. Those A and B block licenses don’t fit well into its LTE plans for multiple reasons: the goofy configuration of the 700 MHz band, the fact that they don’t form a nationwide footprint and interference concerns in A block. When Verizon bid on them and won them in 2008, it probably wanted them as insurance – or to keep them out of AT&T’s hands. It was hoping something better would come along, and it did — in the form of nice big gift-wrapped package of clean nationwide airwaves delivered by its new cable buddies.

The truth is that operators pull these kind of warehousing shenanigans all the time. AT&T, Verizon and the cable companies haven’t done squat with the AWS licenses they won them in 2006. But you don’t actually admit to your regulator that warehousing is what you planned to do along. It got Comcast in trouble a few months back. Now the FCC is asking Verizon the question directly, and a lot hinges on Big Red’s answer. If you’re trying to convince the FCC to approve a spectrum sale, it’s not a good idea to tell them you have been a lousy steward of the public airwaves so far.

Photo courtesy of Flickr user Mark Strozier

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The Wi-Fi hotspots aren’t the usual access points you find in coffee shops and airport terminals. Rather, they’re embedded in the Freebox Internet gateways of its DSL and fiber-to-the-home customers throughout France. The network has been around since 2009, when customers first began agreeing to share part of their broadband access with other Iliad customers. But until now, Free’s new and fast-growing base of smartphone customers hasn’t been able to tap into that huge resource – at least not automatically.

Free Mobile customers with one of its standard plans (€16, or U.S. $21, for Freebox subscribers and €20 for others), will now be able to configure their phones to automatically connect to any Wi-Fi hotspot in the Freebox community, gaining unlimited data access and VoIP calling. Rather than forcing customers to locate SSIDs and enter passwords, the device’s SIM card automatically authenticates and links to the network. No word yet on whether Iliad will extend hotspot access to its lower-tier plans, which scale all the way down €2 a month, but you would think opening up the network to all customers has to be in Free’s roadmap.

By leaning heavily on Wi-Fi, Free can offload enormous amounts of traffic that would normally traverse HSPA+ networks, where capacity is scarce and bandwidth expensive to deliver. In fact, Free has probably been taking it in the teeth for the last three months, since its new data-hungry subscribers have all been relying primarily on 3G for access. Free’s HSPA+ footprint is still limited so it’s had to lean heavily on the networks of its wholesale mobile provider Orange. While Free has placed a 3 GB cap on 3G data, it must have racked up some huge data bills in the last few months.

With the Wi-Fi network active for mobile, Free can relieve those 3G networks of much of their data burden. Of course, the strategy only works if customers are in range of a Freebox hotspot, which means Wi-Fi’s primary beneficiaries will be in urban areas. But urban areas are also precisely where the greatest demand for mobile broadband exists. And 4 million hotspots provide a lot of extra capacity.

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According to the company, FreedomPop plans to discard every vestige of the traditional carrier business model and adopt the strategy of a Web startup. It’s not only giving away bandwidth but wants its customers to treat megabytes as a currency they can earn and trade. Instead of making its money through 4G access, FreedomPop is breaking one of the biggest carrier taboos: It plans to sell services over a free dumb pipe.

Turning 4G into a (nearly) free commodity

In an interview with GigaOM, VP of marketing Tony Miller laid out many of the pieces of FreedomPop’s intricate strategy that have so far gone unreported. The mobile virtual network operator (MVNO) is creating a social network as well as a 4G service; it wants to connect devices that have never seen mobile broadband connection; and it will sell value-added services on top of those connections, possibly even voice. Here are the details:

• FreedomPop plans to give a large block of data away for free. It’s targeting 1 GB at launch, though Miller said it may scale back or increase that allotment before it goes live in the third quarter. Miller said this wouldn’t be a onetime gimmick or promotion: The free bucket would kick in each month. As previously reported, FreedomPop will charge 1 cent for every megabyte over that free cap.

• The MVNO plans to make capacity a currency that customers can earn and trade. Customers will get bigger free data buckets for every customer they refer to the service. And in the future, Miller said, FreedomPop plans to make that capacity transferable. Say you’re running up against your 1 GB cap, but a friend who also happens to be a FreedomPop customer may be well short of hitting his cap. That customer can give you a portion of his free data allotment, allowing you to keep surfing gratis.

• FreedomPop plans to build a larger social network around those bandwidth-swapping capabilities. Customers will be able to form social communities tied to their device, sharing their location, status and other presence information with one another.

• The carrier plans to sell value-added services to its customers. Miller wouldn’t reveal the specific services, but he likened its strategy to the freemium model used by Internet companies: The core services — access and social networking features — will be free, but FreedomPop will layer on paid applications. Miller also said the company is considering launching its own VoIP service but had made no final decisions.

• While the WiMAX shell for the iPhone 4 and 4S has gotten the most attention, Miller said FreedomPop also hopes to launch this year with a mobile hotspot and USB dongle. The shell will act as a mobile hotspot distributing its mobile broadband connection to other devices through Wi-Fi, and it will run off its own battery, which can perform double duty as an iPhone charger. The company is also designing a shell for the iPod touch and in the future plans to connect other smart devices — and not necessarily just smartphones, Miller said.

How on earth will it make money?

Miller stressed that 4G access is only a minor part of the revenue equation. FreedomPop will get cheap WiMAX connectivity from its wholesale partner Clearwire, and it can afford to give most of that access away, he said. Customers who don’t use much data each month will cost FreedomPop little. Customers who consume a lot will quickly move into metered data, which allows the carrier to easily recover its costs.

The customer that poses a problem initially is the one that uses his entire cap each month without exceeding it, Miller said. Eventually those mysterious value-added services Miller referred to will turn those customers into profitable investments. Miller wouldn’t even give a hint as to what most of those services would be, though he did talk up the potential of VoIP.

“Speculatively this is something we would consider,” Miller said. “We’re not coming off the gate with a ‘cut the cord completely’ strategy. We’re launching first with mobile broadband. But down the road a VoIP service could be a possibility.”

Considering that Skype co-founder Niklas Zennstrom is spearheading the launch of FreedomPop through his venture capital firm Atomico, you would think VoIP has to be a strong consideration. Miller himself pointed to its planned launch of a WiMAX shell for the iPod touch, which FreedomPop or another over-the-top VoIP provider could easily turn into a softphone. “Some of these devices that were never meant to be phones can easily be transformed into them,” Miller said.

Miller also said FreedomPop will avoid the huge customer acquisition costs carriers face by taking the same viral marketing approaches as an Internet company. Its customers will beget more customers, drawing them in by the network’s social features and the promise of more free bandwidth. Miller said FreedomPop plans to grow the same way as Dropbox, which grew exponentially by rewarding referrers with more online storage.

“From an economics perspective, we need to look like a Web company,” Miller said. “That means customer acquisition costs can’t be $20 a pop.”

Will it work?

FreedomPop is turning the entire carrier business model on its head. In the data world, carriers have long tried to sell services, but for the most part they have become dumb bit pipes. By giving away access and focusing on services, FreedomPop may well succeed where the operators failed. But it’s also taking a big risk.

FreedomPop is betting its services will somehow be more appealing than any other over-the-top services available through an open broadband connection. It could block access to alternate VoIP providers or whatever the over-the-top equivalents are to its other unnamed services, but then it winds up playing the carriers’ game. But if it does provide unrestricted access to anything and everything out there on the Web and in the iPhone app store, its customers might just take the free data and run.

Sign image courtesy of Flickr user frankh; commodities image by stock.xchng user Lotus Head

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Deutsche Telekom's and AT&T's CEOs look like the best of friends here, but things have changed since the merger between AT&T and DT's T-Mobile USA failed.

The Rural Cellular Association on Tuesday welcomed its newest member: none other than T-Mobile USA. Even by the largest stretch of imagination, T-Mobile, with its national metro market focus, can hardly be considered a rural operator. But in this age of mega-carriers the distinctions between rural and urban and between nationwide and regional hardly matter anymore. It’s AT&T and Verizon Wireless versus everyone else.

In fact, the RCA’s ranks have been swelling with operators with a distinctly urban grittiness. MetroPCS, which focuses on the country’s largest cities, joined last year, but the kicker was when Sprint’s application was accepted last April. Around that time, the RCA started using “competitive carrier” as a stand-in for “rural carrier” in many of its communications. The reason T-Mobile probably didn’t sign up as well was because at the time it was trying to become a mega-carrier itself, wrangling with U.S. regulators to approve its acquisition by AT&T.

Now that AT&T-Mo has been scuttled, any allegiance T-Mobile once held to its large-operator brethren has disappeared. In the last few months, it’s opposed Verizon’s purchase of the cable operators’ spectrum and lashed out at AT&T for trying to get the spectrum auction rules changed. That’s exactly the kind of heat the RCA likes to deliver against the nationwide operators.

So why are T-Mobile’s and Sprint’s interests suddenly aligned with the rural carriers against AT&T and Verizon? It’s a question of sheer size. As Sprint CEO Dan Hesse put it in a New Year’s post for GigaOM, Verizon and AT&T have grown so large they have ascended to a carrier class of their own, creating a de-facto duopoly in the U.S. mobile market. Meanwhile, according to Hesse, there has been plenty of competitive innovation coming from the smaller players like Sprint and T-Mobile, but the larger Ma Bell and AT&T became the more easily they could ignore the dwindling threat of smaller operators.

If you view the wireless market through that lens, then it makes sense for the rurals to band together with smaller Tier I operators to gang up on AT&T and Verizon — even if “small” in this case means having 55 million (Sprint) or 33 million (T-Mobile) customers. When you’re dealing with two outsized incumbents that collectively connect nearly two-thirds of the U.S. population, large is a relative term.

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Those 201,000 lost subscribers may not seem like a lot, but keep in mind that European countries don’t grow operators quite as large as they do here in the States. With 27 million subscribers, Orange is smaller than even T-Mobile USA, which has 34 million customers. Orange saw more than 1 million overall terminations in the period, but those were offset by 837,000 new customers. So while Free is definitely having an impact, it’s not as if customers are shunning the major operators now that Free is on the scene.

Free uses its 5 million Wi-Fi access points located in customer homes as the backbone of its network. Wi-Fi is the secret to its low prices, and Free is using that advantage to the hilt, offering unlimited voice, SMS and data plans for a mere €2520 (U.S. $25.50) a month. When customers leave Wi-Fi coverage, they connect to HSPA networks built either by Free or by its roaming partner (which is, ironically, Orange). While on the cellular network, they face 3 GB monthly caps, but even with restricted use, Free’s data prices far undercut anything France’s three major operators are offering.

Free’s momentum may have slowed down considerably since its high-profile launch in January. Orange said that on the day following Free’s debut it received 150,000 number portability requests, i.e., customers moving their phone numbers over to other operators. That rate has since slowed down to 15,000 per day. Orange has also dropped its rates considerably, offering monthly voice and data plans below €10, but Free’s cheapest plan is an astonishing €2 a month.

Image of Eugene Delacroix painting courtesy of the Louvre.

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Comcast tried hard to become a mobile operator, but it failed to find a way to make the business work — at least that’s what Comcast EVP of public policy David Cohen claimed in a fascinating blog post last week describing why it and its cable buddies decided to sell their spectrum and shack up with competitor Verizon Wireless. That admission is a surprising one to say the least, and if Comcast is being forthright it also raises some troubling questions about the state of the U.S. wireless industry. If a company with a $71 billion market cap and deep roots in the telecom service provider business can’t make a go of the wireless business, what hope is there for any newcomer?

Comcast, Time Warner Cable and Bright House Networks joined together as SpecrtumCo in 2006 to bid on and win licenses in the AWS spectrum auction, but according to Cohen, the venture couldn’t make the math work when it came to actually launching a commercial mobile service. SpectrumCo spent $20 million in prepping its frequencies for launch; tested equipment from Qualcomm, Nokia and Samsung; and explored multiple network technologies ranging from WiMAX and LTE to CDMA’s now long dead 4G standard. The group struck up a partnership with Sprint to share network costs and capacity, and it even invested $1.65 billion in Clearwire to gain access to its WiMAX network.

Despite all of those efforts, Cohen wrote, Comcast couldn’t make wireless work:

Ultimately, but only after a significant investment and years of substantial study and analysis, we determined that it was not feasible to use the AWS spectrum to launch our own wireless network because: (i) we did not have enough spectrum for anything other than an initial launch;(ii) the costs to solve for that problem were too substantial for us; (iii) the costs of building out a new national network were also too high; and (iv) there were significant marketplace hurdles in launching a new, competitive wireless service, which included access to devices at commercially beneficial terms and the need to obtain national roaming rights on attractive terms.

It’s important to note, though, that Comcast had an ulterior motive for its sudden soul-searching online. SpectrumCo’s license sale to Verizon isn’t yet final, and the Federal Communications Commission is paying particularly close attention on how this deal will affect wireline competition in the U.S.  The cable operators aren’t just selling their licenses, they’re also going into business with Verizon, splitting up the residential broadband market between them. The FCC has already asked to see their business plans in private, but Sprint and T-Mobile are demanding that the Verizon and the cable operators release them to the public.

All in all, the FCC probably will probably approve the deal, but Verizon and its SpecrtumCo sellers don’t want to give the FCC any reason to impose restrictions on the sale. Comcast’s problem: the loose lips of its CFO.

Why you don’t admit to being out for a quick spectrum buck

At a Citigroup investment conference earlier this month, Comcast CFO Michael Angelakis said that the cable provider never intended to use the AWS spectrum when it bought it, so it made perfect sense to sell it to Verizon. The mention didn’t get much attention at the time, but FCC Commissioner Robert McDowell noticed, and at CES, as Deadline reported, he questioned whether Comcast and SpectrumCo purchased their AWS licenses under false pretenses.

Spectrum licenses aren’t real estate – you’re not supposed to purchase frequencies and flip them for a profit. They’re held in the public trust and carriers purchase the right to use them. Part of the deal is those carriers agree to actually launch services over them within a certain time limit. At least that’s the theory.

In truth, companies buy and sell and spectrum like securities all of the time. ‘Carriers’ like Aloha Partners and Vulcan Spectrum basically exist as spectrum holding companies. Dish Network may similarly be looking to cash in on the satellite spectrum it purchased from Terrestar and DBSD. Once you get a license, it’s very hard for the FCC to get it back.

But there’s one thing you don’t do. You don’t come out and publicly admit that you have no intention of building a network. That’s why Comcast is walking back Angelakis’s comments. SpectrumCo and Comcast have plenty of time on its licenses so there’s little chance of the FCC taking the licenses back, but generally it’s bad form to acknowledge to your regulator that you’re squatting on the airwaves — especially when you’re asking that regulator to approve a multi-billion sale of those assets.

The FCC is a political entity as well as a regulatory one. If the Commission feels Comcast acted in bad faith for all of these years, it might take it out on the deal, imposing strict timelines on Verizon’s deployment and other requirements that Verizon is sure to not like. Ultimately the FCC wouldn’t kill the deal — those airwaves would never see a network if it did — but it could force SpecrtumCo to lower its $3.6 billion price tag to keep Verizon interested. Comcast has every interest in walking Angelakis’s comments back.

Was Comcast just warehousing spectrum?

I don’t think it was Comcast’s intention to merely flip its spectrum for a quick profit. But I also don’t believe Comcast and its SpectrumCo bedfellows planned on launching their own independent competing wireless carrier — which is what I believe Angelakis was getting at when he delivered his ill-timed comments. At the time of the AWS auction, the cable operators were still facing a big threat from DSL and the “quad-play” services of Verizon and AT&T. The cable companies figured they needed to work with a competitor to the Baby Bells in order to add wireless to their portfolios. Becoming a spectrum holder would ensure they would be equal partners in such a venture.

The vehicle for that wireless service, SpectrumCo and Sprint’s Pivot venture, stalled right after it left the lot. The cable operators’ big stake in Clearwire now looks like a bad investment. Meanwhile, they watched Cox Communications strike out on its own in mobile, only to see it flop. If becoming a wireless player was a mere feint for Comcast, they certainly spent a lot of money and wasted a lot of time keeping up that subterfuge. Comcast made several honest, though misguided, attempts to build a legitimate wireless business with its partners until it ultimately concluded the effort was hopeless.

There has been all sorts of speculation that some new wireless operator like Apple or Google will emerge to challenge the dominance of AT&T and Verizon, but Comcast’s failure should serve as a wake-up call. Apple and Google have enormous resources to be sure, but so does Comcast — and it had the backing of Time Warner and Bright House as well. Additionally, Comcast has extensive experience as a telecom service provider, selling broadband, TV and telephone services to millions of customers. It has the customer service and billing infrastructure in place, and it has its own extensive fiber transport network to serve as the backbone of any wireless service. If any outsider was positioned to break into the wireless operator club, it was Comcast.

Over the last few weeks, I’ve been following Free.fr as it shakes up the French wireless market (check out Om’s excellent profile of Free Mobile). Free’s success in offering dirt-cheap voice and data plans has made many of us covering the telecom industry wonder if a similar upstart could replicate its business model in the U.S. The truth is if any company was ripe to model itself on Free, it was Comcast. Free has built the foundation of its wireless network on 5 million Wi-Fi access points, which it has spent the last several years installing in its broadband customers’ homes. To become a viable challenger to France’s Big 3 wireless operators, Free first had to be successful residential broadband operator.

When it comes to residential broadband there’s no more successful company than Comcast. It had the network in place, the spectrum on hand, the established customer base and the competitive drive to rock the foundations of the U.S. wireless market in ways that a Clearwire or a LightSquared never could. Yet it failed. It may be a hard reality to face, but the wireless market we have today maybe the wireless market we’re stuck with.

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