Converged services bundles, encompassing wired and wireless access and the quad play, are increasingly seen as the main growth path for most major providers. For carriers lacking both wired and wireless networks, this makes strategic alliances a necessity, so that they can offer consumers and businesses a converged product set with a single bill, interfaces and application set, and remain competitive with the leading telcos.
In the US, this has brought Sprint Nextel together with four cablecos – Comcast, Time Warner, Cox and Advance Newhouse – in a partnership of great significance to all sides in their fight to steal a quad play march on the major telcos, AT&T and Verizon, and the possible challenge from the satellite broadcasters. But now the FCC may, almost accidentally, have thrown a spanner in the works and boosted AT&T and Verizon in their own quad play ambitions – which many believe have already been given too much leeway by the regulator anyway, especially since the dual merger deals that created the new AT&T.
The FCC recently passed privacy rules that would prevent the cablecos sharing customer data with Sprint without asking users for an opt-in first. Since a genuine bundled service is entirely dependent on integrating customer data to provide a single bill, unified marketing communications and, in future, carefully personalized service offerings to the individual across all devices and networks, this clause could be highly disruptive.
So far, the cablecos are using Sprint mainly to support their VoIP services and are starting to launch mobile offerings using the Sprint CDMA network. From early 2008 they will go further into a genuine quad play, integrating mobile and cable services – for instance, with remote TV programming via the handset, mobile voice annotation of programs showing on the television, and then new applications delivered over the WiMAX network, currently under construction. The more complex the service set becomes, and the more seamless and unified it needs to appear to the user, the more critical it will be for there to be transparency between Sprint’s and the cablecos’ databases.
Lawyers expect the cablecos to mount a legal challenge to the rules, especially as the impact on their Sprint-based business was probably unforeseen when the privacy changes were being drawn up – they are mainly aimed at telcos using third party direct marketing agencies. A spokesperson for Comcast told the Wall Street Journal that the rules would appear to impede the sharing of customer data with Sprint.
The FCC rules are aimed at preventing a practice known as pretexting, where impersonators access people’s phone records and use that information to get credit or investigate the individual. They state that telcos will no longer be able to share private customer data with “joint venture partners or independent contractors” without first seeking customer opt-in permission to do so, but the rates of customer opt-in are traditionally very low.