New York -- As cable operators here continue to upgrade
their plants so they can deploy new services, competitors hungrily eye their bites of the
biggest telecommunications market in the country.
Cable incumbents Time Warner Cable of New York City and
Cablevision Systems Corp. control the industry's largest cable clusters, with Time Warner
boasting more than 1 million customers in Manhattan, western Brooklyn and Queens, and
Cablevision serving 535,000 subscribers in eastern Brooklyn and the Bronx.
Analysts and competitors conceded that Time Warner and
Cablevision have brand loyalty, solid management and strong consumer offers here. But the
sheer size of the market holds too much appeal for new entrants to shy away.
"Every week it seems like there's another competitor
in the marketplace," Cablevision president of product management and marketing
Michael Bair said.
Accustomed to being bombarded with choices in other aspects
of their lives, New Yorkers appear willing to entertain alternatives for video, phone and
high-speed Internet services.
"People are more demanding here, more vocal, more
willing to complain," said John deGarmo, president of the New York City chapter of
the Cable & Telecommunications Association for Marketing.
Talk to a cross-section of New Yorkers, and every one has a
different story about their experience with cable or the competition. While no single
experience can be considered representative of the whole market, each points to the need
for better customer service, or at least open communication.
Manhattan resident and journalist Elizabeth Lesly Stevens
told Multichannel News she signed up for cable-television service from RCN Corp.
more than one year ago, and she was happy with the monthly savings over her previous
service provider, Time Warner.
Then, she had what she was expecting to be a two-way cable
modem installed this past March. Stevens was dismayed to find that she still needed a
telephone-return path. RCN assured her that it was upgrading the plant, and she was told
she could get a two-way modem within three or four months.
After months of progressively heated phone calls, an RCN
executive promised Stevens in early November that her building's wiring would be upgraded
within the next two weeks. After returning from a trip the weekend after Thanksgiving,
Stevens found a letter from RCN stating that her building had indeed been upgraded for
two-way, and a personal voice-mail message said the same thing.
Stevens scheduled an installation for the very next day,
leaving detailed instructions with her babysitter. When she arrived home, instead of
finding a two-way modem, she found a memo telling her that the building was still only
wired for one-way cable-modem service.
"It's so perverse," Stevens said of her 10-month
An executive at RCN's Manhattan office acknowledged that
two-way cable-modem service was not available to Stevens' building the week after
Thanksgiving, as planned. He said RCN worked the following weekend to correct the problem,
adding that Stevens' cable-modem service would be ready for an upgrade to two-way by the
middle of last week.
Cable and direct-broadcast satellite consultant Steve
Liebmann, president of S. Liebmann & Associates Inc., is a Time Warner Cable customer
in his Manhattan apartment, as well as a Cablevision customer at his summer home in a
suburb north of the city.
Liebmann already subscribes to DBS in his second home,
although he keeps a limited Cablevision subscription for the broadcast channels and in
case his DBS service experiences rain fade. He said he was also at risk of switching to
DBS in Manhattan before Time Warner upgraded his set-top box at his request.
With the new hardware, Liebmann immediately saw an
improvement in his television picture. "It took me from being a customer who might,
at some point, put a satellite dish on my balcony to someone who's very happy with
cable," he said.
Although loyal to Time Warner for video, Liebmann admitted
that he's likely to sign up for Bell Atlantic Corp.'s digital-subscriber-line service,
partly because Time Warner's Road Runner high-speed-data service is not yet available to
"I feel like a turncoat getting DSL," Liebmann
said. "It's like buying a foreign car. I'd like to buy American," but not if
foreign cars offer a better value.
Cablevision and Time Warner are in the midst of massive
plant rebuilds that will allow the operators to offer new services, including digital
cable, high-speed Internet and even telephony.
In what he called one of the most aggressive rebuild
strategies in the country, Bair said Cablevision is upgrading its plant in New York City
to 860 megahertz over the next two to three years.
While Bair wouldn't give a timetable for new service
rollouts here, Cablevision already markets its Optimum Online high-speed-data service in
parts of Connecticut and Long Island, N.Y., selling cable modems at its company-owned The
Wiz consumer-electronics stores.
The operator also sells both local and long-distance
telephone services in Connecticut and on Long Island. AT&T Corp. recently announced a
local phone offer in New York, and Bell Atlantic is hoping to add long-distance to its
Cablevision has not said when it will offer digital cable
in Brooklyn or the Bronx, although the operator plans to launch its digital-cable service
through The Wiz in the New York area sometime next year.
Time Warner Cable of New York City senior vice president
and general manager Barbara Kelly said the local rebuild is nearing completion. The
rebuild held up launches of digital cable and Road Runner high-speed-data service: Road
Runner launched in limited areas of Manhattan in September, and digital cable will roll
out in the outer boroughs before heading to Manhattan.
While analysts said the local cable incumbents are not too
far behind the curve when it comes to rolling out new services here, competitors hope to
make inroads as quickly as they can.
Bell Atlantic Video Services president Dick Beville said
the company is preparing to bring its DirecTV Inc. DBS service to the New York market in
the first quarter of next year, offering consumers a hardware-rental option similar to
The regional phone company already provides the DBS service
in a number of East Coast markets, but it wanted to make sure it had everything right
before moving into the Big Apple.
"New York is the flagship," Beville said.
Demand for DirecTV and EchoStar Communications Corp.'s Dish
Network could pick up in New York now that both companies offer local network signals via
To some extent, physical barriers to entry have limited DBS
penetration in New York, which has the nation's highest penetration of multiple-dwelling
But it's no longer unusual to spot DBS dishes attached to
balconies or the sides of buildings. Property owners are becoming more receptive to
dealing with DBS providers that want to install single dishes capable of serving entire
buildings, EchoStar director of commercial services Wiley Reed said.
Cablevision pointed to local and regional channels such as
News 12 and the MetroChannels that can't be found on RCN or DBS.
The MSO also plays on New Yorkers' hunger for sports and
entertainment by promoting its corporate ownership of several local sports teams, plus
venues like Madison Square Garden, Radio City Music Hall and Clearview Cinemas.
The operator offers discounts on local events to
Cablevision customers, and it plans to implement a more formal affinity program that ties
all of the properties together following the launch of its new digital-products bundle.
Aside from the customer-loyalty benefits that Cablevision's
other corporate properties allow, they also give the operator additional forums for
advertising new products. Cablevision owns 20 major billboard positions in the New York
area, as well, Bair said.