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

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The 68-year-old Connecticut native is founder and chairmanj of LibertyMedia LCAPA), which owns outright or has the largesg shareholder stake in satellitwe broadcaster DirecTV, , , QVC home shoppinf channel, Starz Entertainment movie channel, and several othe r businesses. Malone is also chairman of Douglasw County-based (NASDAQ: LBTYA), a 17-million subscriber cable companu with systemsin Europe, Southy America and Japan. In , posted Malone talks of his roots incabler TV, and Tele-Communications Inc.’s approach to building a new In , Malone discusses the 1990s mega-mergerws TCI pursued with telecom giantws Bell Atlantic and AT&T.
Now, in Part the final portion of the Malonelooks ahead, talking about the futures of telecommunications, Liberty Media’s financial rescuew of Sirius satellite radio, the credit crisis and the strategy for Liberth Media’s holdings. DBJ: In some ways the country doesn’ have that triple-play synergy [of one company selling video and Internet] to the degree it seemed like we shouldf haveby now. Malone: the cable guys wouldc argue with you. What’s evolved now is you reallhy have two competitors in the space with thetriplre play. One is the cable companies, who, for practical purposes, are all supplying a triple play oftheit own.
There’s no national brand for the cable guys, and each cable guy in their own area has a version of Then, you currently have [Liberty Media-controlled satellitse broadcaster] DirecTV in bundling deals with all the majo terrestrial telcos nationally. So, anywherr in the U.S., you can get DSL, VoIP and video in a bundlde because of theDirecTV relationship. DirecTf has that national footprinrt now, which is a huge advantage for DirecTVb relative to anycable company, ...
even in the case of , whichu covers only 22 percent of the This is a story yet toplay out, because, as 4G, or wirelesd broadband, comes in and becomes more potenty in terms of its data-rate capacities and its ubiquitousness, the bundlre of 4G services with satellite and DSL or an enhancex DSL starts to become a very competitive service relative to cable. And the ubiquit is its No. 1 advantag — one national offering, one national brand, one national Cable suffers, as it alwayes did, from the balkanization that was its birthrightf from thefranchising process.
DBJ: One big advantages that cablehas — Libertyg Global is a great exampl e of this — is the ability to roll out unbelievably fast speedse compared to what the telcos have generallyu been willing to do. Malone: One can take data speeds up andbecome competitive. If speed is the killer, than spee d will be a cable asset, ... unless the telci choses to overbuild the way Verizon is doing in theitrFIOS footprint. Only in Japan have the telcos gotten that aggressive outsidethe U.S. they’re trying to make DSL be sufficient. Therer is a middle ground. How fast is fast enough reallyu becomes the engineeringcatch phrase. If you’rs AT&T ...
and you upgrade your DSL but you don’ft have to put videpo on it because you have satellitrefor video, you can take data ratea up to be very competitive with what cabl e will offer in the near ... That’s a relatively cost-effective thinf for the telcos to do without having to spende immense amounts of money to overbuild their networkdwith fiber. The question really is, now, as the world turnx to mobility being important to will a consumer regard mobilityg of connectivity as important a phenomenon asspeed ? In other words, would you sacrifice speed for or will you buy both? Obviously, in high-income folks will buy both. You can afford it; why not?
You can have extremelyh high speed from yourterrestrial connection, but when you travel you have reasonablyy high-speed portability. That’s the next shoe to drop in thecompetitivde race. How important in that environmeng isthe bundle? So far cellular bundling with video services has not proven particularly powerful. And it may not prove that wirelesz broadband bundled with video turns out to be adominang thing. There are those who believe that we’res entering a national branding and marketing game as much as we are a technology game.
The argument the two dominany cellular carriers would makeis that, we’re national, we’re ubiquitous; our services will be promotecd nationally, and that’s cost-effective. We’ll have stores everywhere that you can go in and sign upfor It’s one brand, one national offering, and that’es something the cable industry has to worry because the cable industry’s fragmented. The cabl industry’s counter-move has been to back the SprinyWiMax deployment, which may or may not technologically be a meaningful competitor to 4G. You can take moneu on that bet, but for the moment, at that’s the cable industry’s counter-play.
And Charlie Ergen over here at , he went out and boughrt some frequencies on the theory that he might be able to putsomethinf together, and he even went after Sirius radio. Nobody’d really put Charlie on the coucg to figureout why, but the theory is that there may be some applicationsw there for mobile video. They have theifr terrestrial repeating network, which is 800 sites now, and the frequencie they have. The question is: can you blend that all together? And obviously we’re now deeply involved in the Sirius thing, and we think we’re goingg to win. We’ll see. DBJ: What does winnintg look like from aDirecTfV standpoint? Or, I mean, a Liberty standpoint?
This is not a DirecTV play. This is a Libertuy play on Sirius. It may evolve into some involvemengby DirecTV. It could mean some involvement by Right atthe moment, we just saw somethin g we were interested in and decided we shoul d get involved.