Cable-mobile merger may be good: FCC's McDowell

NEW YORK (Reuters) - A merger between a U.S. cable operator and a mobile service provider could potentially be a healthy option for the communications industry, Federal Communications Commissioner Robert McDowell said on Wednesday.

While McDowell declined to comment on specific companies, he said that any deals bringing new players into a market may benefit consumers, when asked about the viability of a cable operator buying a wireless provider.

"Philosophically, the fact a company wants to get into a different platform can be healthy as that shakes up the incumbents," he told the Reuters Media Summit via a telephone link from Washington, D.C.

"I like to see that sort of healthy paranoia in the marketplace," he added. "It increases innovation and lowers prices and ultimately consumers can benefit."

Cable industry analysts have speculated that Comcast (CMCSA.O), the biggest U.S. cable operator, could make a bid for Sprint Nextel Corp (S.N), the No. 3 U.S. mobile service.

Comcast is one of several cable providers involved in a venture with Sprint that aims to compete better with bigger phone operators by offering subscribers a package of cable and wireless services.

The U.S. wireless industry is currently dominated by four large national carriers including AT&T Inc (T.N), the No. 1 player, and Verizon Wireless, a venture of Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L). T-Mobile USA, owned by Deutsche Telekom (DTEGn.DE), ranks after Sprint.

Also with a view to boosting competition, McDowell said he hopes new companies enter the wireless market via an upcoming U.S. government auction of highly coveted wireless airwaves.

Web search leader Google Inc (GOOG.O) has garnered a lot of media interest by suggesting that it may bid in the auction.

"I'd love to see new entrants who are not already license holders walk away happy, successful bidders. I think the more new blood we have in the wireless market the better," he said.

He declined to comment specifically about Google, but said a new entrant "would be positive in a disruptive type (of) way."

McDowell said that while he was in favor of opening up U.S. mobile networks to a wider variety of devices and services, he disagreed that such changes needed to be a requirement for the auction bidders.

(Click here to see Reuters MediaFile blog)

(Editing by Phil Berlowitz)