Facing FiOS

As Verizon Communications gets closer to introducing its FiOS TV video product in New York City, two potential competitors offered their take on how to battle the telephone giant at an industry conference last week.

At the Deutsche Bank Media & Telecommunications conference June 9, Time Warner Cable chief operating officer Landel Hobbs said that the No. 2 cable operator will counter the telco TV threat with advanced services and innovative pricing plans.

New York is Time Warner's second-largest system with about 1.4 million subscribers (Los Angeles is No. 1 with 1.7 million customers).

Verizon hopes to start offering FiOS later this year in all five boroughs of New York, including four controlled by Time Warner Cable: Staten Island, Brooklyn, Queens and Manhattan. Cablevision Systems is the incumbent cable operator in the Bronx.

Hobbs said that Time Warner Cable is prepared, readying its plant — it is already all-digital in Staten Island, Brooklyn and Queens and will be all-digital in Manhattan by the end of the year — for additional HDTV channels and its Start Over service. Hobbs said Time Warner will nearly double its HDTV capacity in New York from 55 channels to about 100 channels by the end of the year, when its Start Over service should also be available.

On the pricing front, Time Warner has been rolling out a “price-lock guarantee” package which enables customers to lock in a set price for video, voice and data service if they agree to a two-year contract.

One cable operator that has already weathered a FiOS onslaught in one of its key markets — overbuilder RCN — said that the tide is beginning to turn.

At the Deutsche Bank conference on June 10, RCN CEO Peter Aquino said that despite losing subscribers initially, RCN and even Comcast are beginning to rebound. “I don't think they [FiOS] got the 30% share they were shooting for,” he said.

Aquino added that the introduction of its “Analog Crush” all-digital initiative in Boston July 4, which will substantially increase HD channel capacity, should continue keep that momentum going.

But Verizon COO Denny Strigl, speaking at the same conference on June 10, said that the nationwide build out of the network could exceed the 18 million homes passed target set for 2010.

Verizon also is working on franchises in Philadelphia, Pittsburgh and Washington, D.C. But Strigl stressed that Verizon was not saying they would definitely increase the FiOS reach. “We have no specific announcement to make today,” he said. “You will hear more from us in the future.”