Cable Operators Facing Wi-Fi Roaming Issues
Five of the six top U.S. cable operators recently signed Wi-Fi roaming pacts to let their broadband subscribers tap into more than 50,000 wireless hotspots across the nation, particularly in the Northeast and mid-Atlantic. Six weeks later, they're trying to figure out how best to operate the new wireless broadband networks and make some money from them. Executives from the five large cable providers -- Comcast, Time Warner Cable, Cox Communications, Cablevision and Bright House Networks -- said they're grappling with such key issues as locating the Wi-Fi access points, creating minimum service standards and determining the business model for the roaming service.
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The cable partners seek to ease consumer access to their loose collection of Wi-Fi hotspots through a shared, uniform Wi-Fi network identifier, known as “CableWiFi,” under the pacts announced at the Cable Show in late May. The new roaming architecture has been deployed on Cablevision’s Wi-Fi network in the New York City area and Bright House’s Wi-Fi network in central Florida. The five operators said in May that they'll slap the CableWiFi label on all of their Wi-Fi hotpots over “the next few months.” Further down the line, plans call for the roaming system to enable broadband subscribers to hook up their devices automatically to the CableWiFi hotspots. The operators have started a website that plots out the locations of the shared hotspots.
Some key issues remain to be resolved, executives said. Tom Nagel, general manager of wireless services at Comcast, said the cable partners are still working to develop a minimum set of standards for Wi-Fi service delivery. Speaking at a recent industry show and in later interviews, he said the goal is to develop metrics and baselines for operators to meet before they can use the new “CableWiFi” Service Set Identifier (SSID).
The five operators are still experimenting with how and where to place their wireless access points, executives said. Nagel said the partners are seeking to focus coverage on locations where people spend their “dwell” time, or parks, shopping malls and other areas where they gather together for lengthy periods of time. Unlike cable’s new mobile ally, Verizon Wireless, “we're not trying to go for geographic coverage,” Nagel said. “We're not trying to have a red map,” he said of Wi-Fi coverage points. Another outstanding question is how to generate additional revenue from the wireless roaming pacts. Executives believe they can cut customer churn by offering the new Wi-Fi roaming service to broadband subscribers, but it’s not clear whether they can earn a more direct return on their investment. One possible way to generate more revenue, they said, is to offer day passes to non-subscribers.
Cable officials agreed that such wireless broadband initiatives are critical to extending the reach of their home broadband services. Michael Roudi, senior vice president-mobile services at Time Warner Cable, said he views Wi-Fi as an on-loading service, rather than one dedicated to off-loading of Internet Protocol traffic. While wireless carriers are starting to rely more heavily on Wi-Fi technology to offload cellular traffic from their main mobile networks, he said cable operators are seeking to use Wi-Fi to direct more consumer traffic to their wired broadband networks. Comcast, Time Warner Cable, Cox and Bright House, meanwhile, seek approval of their deal to sell for $3.9 billion advanced wireless service licenses to Verizon Wireless and sell each other’s products. Critics like Sprint Nextel have fiercely attacked the spectrum deals, under review by the FCC and Justice Department, as anti-competitive.
"Nothing” in the deals changes the cable operators’ “ability and incentive to continue to compete vigorously and grow their backhaul businesses,” Comcast said in a filing posted Tuesday in docket 12-4. “The commercial agreements do not contain any exclusivity provisions for Verizon Wireless related to backhaul,” and the cable companies “have incentives to attract as many customers on a backhaul facility as possible,” said the report of operators’ meeting with aides to Commissioner Mignon Clyburn. The operators’ “WiFi service is accessible to customers without regard to the customer’s choice of wireless service provider,” and that won’t change because of the AWS deals, the filing said. “Comcast has pursued, and will continue to pursue, third-party offload agreements.” The cable partners’ Wi-Fi expanding services will compete with Verizon’s Wi-Fi services, and other cable operators are expected to join the Wi-Fi roaming network, the filing said.
Comcast has already started selling Verizon Wireless’ service in a number of markets. After introducing the service in three pilot markets -- Seattle, San Francisco and Portland, Ore. -- earlier in the spring, Comcast late last month expanded the service to nine other states: Arkansas, Georgia, Indiana, Kentucky, Louisiana, Michigan, Mississippi, South Carolina and Tennessee. Comcast, which previously sold Clearwire’s WiMax service in many of its markets, is packaging the new wireless service with its triple-play bundle of cable services as a “home-and-away bundle,” with a free smartphone. Plans call for extending the rollout further over the rest of the year.
Time Warner Cable has begun rolling out the new Verizon Wireless/cable bundles in its Northeast Ohio, North Carolina, South Carolina and Wisconsin franchise areas. Cox has started introducing the new cable/wireless offering in Oklahoma City and Tulsa, Okla. Bright House intends to follow suit with similar rollouts in its territories later this year. Cablevision, Time Warner Cable and Comcast before the AWS deal teamed up to create a loose joint network in the Northeast, and CableLabs had published a technical specification designed to foster Wi-Fi roaming between cable operators.