Cable Show 2009: Cable Bullish on Wireless Opportunity

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Cable Show 2009: Complete Coverage

Cable operators don't see offering wireless data and voice services as
the fourth component in a new "quad-play," but instead as a logical access point
for subscribers to enjoy their core data, video and voice services, according to
executives speaking at Cable Show '09 Friday.

In the panel session "Air Play: Cable's Wide-Open Wireless Future,"
moderated by One Touch Intelligence analyst Matt Stump, executives from
Cablevision, Cox Communications and Cablevision outlined different strategies
for bringing services to subscribers on the go. But the overall goal is the
same: to keep customers from shifting to another service provider once they
leave the home.

"It's really an inside-out strategy," says Mike Roudi, VP of wireless for
Time Warner Cable. "The cable company owns the customer within the four
perimeters of the walls of their house, but as soon they open the door, you sort
of get disassociated with your customer. We want to make it so when they walk
out the door, down the driveway, and then drive down the street, they don't have
to turn off Time Warner Cable services."

Time Warner Cable's strategy for providing such mobility is Clearwire,
which counts Time Warner Cable and other major MSOs as investors along with
Sprint, Google and Intel and which is deploying a wireless broadband network
based on WiMax technology. Clearwire will sell its broadband services on a
wholesale basis to cable companies like Time Warner Cable, who will handle
customer marketing, packaging and billing.

"We're gearing up toward a launch in the fourth quarter of this year, and
it's pretty exciting stuff," says Roudi, who expects that Clearwire will first
focus on providing data service and then phase in voice gradually, much as cable
did with its broadband product.

Cox Communications has taken a very different approach. The
privately-held firm snatched up significant chunks of wireless spectrum in the
government's 700 MHz auction last year and is currently readying its own
wireless broadband network, which it plans to launch later this year.

Cox has seen the need to play in the wireless space for some time, says
Stephen Bye, VP of wireless strategy and development for Cox, and was one of the
cable companies involved in a previous failed wireless venture with Sprint
called Pivot. Bye says the lesson the company learned from Pivot was that Cox
needed to be in full control of its wireless service to deliver an experience
consistent with, and marketed within, the Cox brand.

So while the network Cox is building will use CDMA voice technology that
is compatible with Sprint, and Cox may rely on Sprint capacity in a few markets,
the service will be marketed strictly as a Cox service and Cox will be in firm
control. Cox will own its own towers in some markets, and control its own IP
backbone and switching infrastructure for the service.

"When you boil it down, we want to have a Cox-branded experience, and
what we took away from the Pivot venture was we didn't have the necessary
control points to deliver against the brand [with a good customer experience],"
says Bye.

Meanwhile, Cablevision has embarked on a technically less challenging
wireless play by investing some $300 million to create Wi-Fi hotspots across its
footprint in highly-trafficked areas such as malls, parks, cafes and commuter
train platforms that provide broadband access to Cablevision customers on the
go. The Long Island-based cable operator is also negotiating with local train
lines in New Jersey, Connecticut and New York to bring Wi-Fi service to their
trains.

Cablevision has seen good initial take-up for the service, and announced
this week that it has recorded one million Internet sessions on the Wi-Fi
network since launching last fall. The network, which provides 1.5 Mbps service,
is due to be completed next year.

John Bickham, president of cable and communications for Cablevision,
views the Wi-Fi initiative as a simple extension of Cablevision's services
within the home. He adds that if Cablevision were to grow its data subscribers
by just 5%, the network would pay for itself in five years. If Cablevision were
able to increase its prices by a few percentage points, it would recoup its
Wi-Fi investment in less than five years, particularly since 65% of its
connected customers take all three services.

"That makes this investment look very reasonable, any way you stare at
it," says Bickham.

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