Sprint, MCI and Cable


In Anaheim the other week, Sprint Corp. — a former friend and occasional rival to cable's powers that be — had a booth at the Western Show, and officials booked appointments with reporters to discuss pending cable deals.

But the officials ended up not being ready to talk and had little to say when one of my colleagues showed up for a scheduled interview.

Guess we now know what they couldn't talk about.

Time Warner Cable's agreement last week to lease backbone services from Sprint and MCI prompted a nostalgic look through the files.

Recall: Sprint, circa 1994, had designs with cable's then Big 3 of Tele-Communications Inc., Comcast and Cox to build a wireless and wireline phone network with nationwide reach. They wanted to work together to upgrade the cable plant and bid on licenses for newly released wireless spectrum — a joint venture that eventually became Sprint PCS. People remember the PCS part, but forget the wireline aspect.

Over time, the wireline partnership fell apart over issues of, you guessed it, price and control. Among other things, Sprint sought a chunk of the MSOs' emerging high-speed data business — something the operators were smart enough to completely nix. A headline over a Diane Mermigas piece in Electronic Media
at the onset of the partnership, in October 1994, put it well: "A Cable-Telco Marriage of Inconvenience."

Ultimately the marriage became inconvenient, but the Sprint PCS stakes repaid the MSOs a handsome profit.

In the years since then, Sprint toyed at becoming a rival to cable using wireless frequencies that were intended to provide a low-cost wireless video alternative to cable but which Sprint wanted to use for voice and data services. Integrated On-Demand Network, or ION, was the last catchy name for Sprint's MMDS designs. But ION's spark fizzled.

MCI has always been in the rival camp. It entered into one of those marriages of convenience with Rupert Murdoch's News Corp. to buy direct-broadcast satellite spectrum in 1995. (Footnotes: Scott Kurnit, longtime cable new-media guy, was hired as CEO for an online venture the two planned. And Michael Milken later settled a complaint from the Securities and Exchange Commission over $15 million he pocketed for advising on the alliance at a time when he was banned from securities activity. Thanks to Steve Keating's indispensable book Cutthroat
for the latter factoid.)

MCI's strategic role always was fuzzy: DBS-based business services? But its $682 million bid for 28 high-power DBS slots won in early 1996, and MCI was ready to be a DBS player with News in American Sky Broadcasting (ASkyB).

Sadly, it all came a cropper after ASkyB allied with EchoStar, then Murdoch jilted EchoStar for the MSO-backed PrimeStar alliance. EchoStar sued for breach of contract and won.

Now both MCI and Sprint are pitching themselves as vendors to cable. And they have a big contract with Time Warner Cable to get them started.

By the way, another headline before its time: Nov. 21, 1994, Business Week: "Now, Time Warner Is a Phone Company."

It really wasn't, then. But it's poised to be one now — with a couple of familiar-name vendors.