New MediaFLO chief outlines the future of FLO TV

That was all set to change this year. On Feb. 17, Qualcomm was prepared to switch flip the switch in 40 markets, adding 15 new cities to its footprint and, perhaps most importantly, fill in the coverage holes in 25 existing markets, which would allow MediaFLO to market the TV service more effectively. But a week after Stone moved into his new office in San Diego, President Obama signed DTV legislation that delayed the clearing of 700 MHz spectrum until at least June 12, while the government tries to sort out the mess surrounding the transition to DTV.

"Clearly we're disappointed," Stone said. "We're not happy about this. There were a set of rules put out, and then the rules got changed. We had an opportunity with a lot of coverage already built, coverage that we were basically ready to turn on in a lot of markets around the country. … In terms of the FLO business, it's a speed bump. It's not anything hugely problematic or catastrophic, but in the immediate term, it is really unfortunate, because it's not allowing us to go out with a truly national message in the big markets."

MediaFLO had planned a big nationwide marketing push on the back of its newly expanded network, and the operator had little choice but to continue with those marketing plans despite not launching that new network, Stone said. Events like the NCAA Men's Basketball Tournament, which FLO TV is broadcasting live over AT&T and Verizon Wireless FLO phones, wasn't delayed along with the DTV transition.

"You have to remember we're in the content business, we're in the live TV business," Stone said. "A lot of things you're going to see us drive and promote aren't on our timetable—things like presidential inaugurations and live sports events. … There are events happening between now and June that you'll see us get behind. You'll see some of things pop up in advertising in the next couple of months. It's not something the DTV transition is preventing us from doing. It's just we're not going be able to realize the full opportunity and our customers aren't going to be able to realize the full opportunity of those efforts because the coverage isn't fully there."

The worst case scenario would be if the government decides to extend the DTV transition deadline further. If that happened, Qualcomm wouldn't be the only operator affected. Verizon Wireless plans to launch long-term evolution (LTE) networks later this year, and so far it hasn't been able to use its 700 MHz due to interference constraints (its LTE trials in the US were performed over advanced wireless services spectrum). Cox Communications also plans to launch a CDMA network this year. Any further delay could crimp those plans and possibly produce a backlash from operators that spent billions of dollars at auction for that spectrum.