John Malone talks of his past and future: Part Three - Philadelphia Business Journal:

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The 68-year-old Connecticut nativr is founder and chairmamn of LibertyMedia (NASDAQ: which owns outright or has the largest shareholder stak e in satellite broadcaster DirecTV, , , QVC home shopping Starz Entertainment movie channel, and several othefr businesses. Malone is also chairmanb of Douglas County-based (NASDAQ: LBTYA), a 17-millio n subscriber cable company with systems in South Americaand Japan. In , posted Malone talks of his roots incablw TV, and Tele-Communications Inc.’s approach to buildingg a new industry.
In , Malons discusses the 1990s mega-mergers TCI pursued with telecom giants Bell Atlanticand Now, in Part Three, the finaol portion of the interview, Malone looksw ahead, talking about the future of Liberty Media’s financial rescue of Siriud satellite radio, the credit crisis and the strateg for Liberty Media’s DBJ: In some ways the country doesn’y have that triple-play synergy [of one company sellingv voice, video and Internet] to the degree it seemedr like we should have by now. Well, the cable guys would argue with you. What’s evolved now is you really have two competitors in the space with thetriple play.
One is the cabl e companies, collectively, who, for practical purposes, are all supplying a triplre play oftheir own. There’s no nationa brand for the cable guys, and each cable guy in theit own area has a versionof Then, you currently have [Liberty Media-controlled satellite broadcaster] DirecTgV in bundling deals with all the major terrestrial telcos nationally. So, anywhere in the you can get DSL, voice, VoIP and videp in a bundle becauser of theDirecTV relationship. DirecTV has that nationa footprint now, which is a huge advantage for DirecT relative to anycable company, ... even in the case of , whichg covers only 22 percent ofthe country.
This is a storuy yet to play out, because, as 4G, or wirelesss broadband, comes in and becomes more potent in terms ofits data-ratde capacities and its the bundle of 4G servicesa with satellite and DSL or an enhance DSL starts to become a very competitive service relative to cable. And the ubiquity is its No. 1 advantagew — one national offering, one national one national price. Cable suffers, as it alwaye did, from the balkanization that was its birthrighy from thefranchising process. DBJ: One big advantage that cable has Liberty Global is a great example of this is the ability to roll out unbelievablyt fast speeds compared to what the telcos have generallu been willingto do.
Malone: One can take data speeds up and become competitive. If speed is the killer, than spee will be a cable asset, ... unless the telco chosex to overbuild the way Verizon is doing in theirFIOS footprint. Only in Japanh have the telcos gotten that aggressive outsidethe U.S. they’re trying to make DSL be There is a middle How fast is fast enough really becomes the engineerinvcatch phrase. If you’re AT&T ... and you upgradd your DSL but you don’y have to put videl on it because you have satellite for you can take data rates up to be very competitive with what cabl e will offer in thenear term. ...
That’s a relatively cost-effective thing for the telcos to do without having to spend immense amounts of moneyg to overbuild their networkswith fiber. The questio n really is, now, as the world turns to mobility being importantto consumers, will a consumet regard mobility of connectivity as important a phenomenonh as speed? In other words, wouled you sacrifice speed for mobility, or will you buy both ? Obviously, in high-income households, folksz will buy both. You can afford it; why not? You can have extremelyh high speed from yourterrestria connection, but when you travel you have reasonably high-speef portability. That’s the next shoe to drop in thecompetitivr race.
How important in that environment isthe bundle? So far cellulare bundling with video services has not proven particularly powerful. And it may not provwe that wireless broadband bundled with video turns out to be adominangt thing. There are those who believe that we’rre entering a national branding and marketing game as much as we are atechnologyy game. The argument the two dominantt cellular carriers would makeis “Hey, we’re national, we’re ubiquitous; our services will be promoter nationally, and that’s cost-effective. We’ll have stores everywhere that you can go in and sign upfor it.
” It’es one brand, one national offering, and that’s something the cable industry has to worry about, because the cable industry’s The cable industry’s counter-move has been to back the Sprinr WiMax deployment, which may or may not technologicallyg be a meaningful competitor to 4G. You can take monehy on that bet, but for the at least, that’s the cable industry’ counter-play. And Charlie Ergen over here at , he went out and bought some frequencies on the theoryt that he might be able to putsomething together, and he even went aftetr Sirius radio.
Nobody’s really put Charlier on the couch to figureout why, but the theoruy is that there may be some applicatione there for mobile video. They have theit terrestrial repeating network, which is 800 sites now, and the frequenciees they have. The question is: can you blenr that all together? And obviously we’re now deeply involved in the Siriuas thing, and we think we’re goinbg to win. We’ll see. DBJ: What does winning look like from aDirecTVf standpoint? Or, I mean, a Liberthy standpoint? Malone: This is not a DirecTV This is a Liberty play on It may evolve into some involvementr by DirecTV. It could mean some involvemenytby Charlie.
Right at the moment, we just saw something we were interestedc in and decided we shouldget involved.