Today in Philly Tech History 5/7/1991: Comcast acquires Metromedia's Philly cell phone business

Tom Paine

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On May 7, 1991, Comcast acquired Metromedia Co.'s Philly area cellphone operation for $1.1 billion. Comcast planned to combine the operations it already owned in North Jersey and Delaware with its new acquisition to give it a regional giant with 7.3 million "pops" (# of potential subscribers) and the scale to compete with telco Bell Atlantic regionally. Although Metromedia received some preferred shares as a result of the deal, Comcast would have total management control and own all common shares.

As the wireless business evolved, Philadelphia-based Bell Atlantic merged with NYNEX in 1997 to eventually become Verizon, and the scope of competition became more national than regional. In 1999, under pressure to sell noncore assets and focus on its cable-related operations, Comcast sold its wireless business to SBC Communications (now AT&T) for $1.7 billion.

It was not, however, the end of Comcast's efforts to build a wireless strategy that would fit with its business. In 2006, Comcast joined a consortium of cable companies (and Sprint Nextel) to acquire a national footprint of advanced wireless spectrum in an FCC auction for $2.37 billion. In 2008, Comcast invested $1.5 billion in Clearwire, which was planning to rollout a WiMAX-based service nationally, giving Comcast the capability to resell the service to its customer base. However, WiMAX was surpassed by LTE, Clearwire did not get too far off the ground, and Comcast sold very few Clearwire subs. It eventually would sell its Clearwire stake.

In 2011, Comcast tried an entirely different approach, teaming up with its cable partners to sell the spectrum holdings they acquired in 2006 to Verizon Wireless for $3.6 billion, and entering into a joint venture with Verizon Wireless under which the cable operators and Verizon Wireless could resell each others' services, as well as establishing a product development joint venture between them.

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