Comcast, Time Warner, Cablevision Offering Shared 'CableWiFi' Network

Verizon's cable partners have formed a shared WiFi network of 50,000 hotspots for customers to use. Increasingly, differences between the wireless carriers' and cable companies' offerings are disappearing.

There€™s a new WiFi game in town. Comcast, Time Warner, Bright House Networks, Cox Communications and Cablevision Systems have announced €œCableWiFi,€ a new network of more than 50,000 WiFi hotspots that can be shared by the customers of the various partners.

Bright House and Cablevision have already implemented the CableWiFi brand in Central Florida and the New York City area, respectively, and the others plan to add the name to their branded WiFi hotspots during the next few months.

Cablevision aside, the partners have recently also entered into bundling agreements with Verizon Wireless.

€œThis effort adds great value to our high-speed Internet customers by providing free wireless Internet access on all of their WiFi-enabled devices in our markets and additional areas across the country,€ Nomi Bergman, president of Bright House, said in a May 21 statement.

In September 2011, Time Warner announced a $15 million initiative to build out a free WiFi network for customers in the Los Angeles area. Nonsubscribers could also access the network on a pay-as-you-go basis. Its WiFi rollouts were thought to be an effort to help it compete against rivals DirecTV, Dish Network and Verizon€”though three months later it entered an agreement with the latter.

Sharing news of what would become a highly controversial arrangement, Verizon and the cable companies said in a Dec. 2 statement that the cable companies planned to sell Advanced Wireless Services (AWS) spectrum to Verizon and, further, that the various parties €œwill become agents to sell one another€™s products and, over time, the cable companies will have the option of selling Verizon Wireless€™ service on a wholesale basis.€

€œThese agreements, together with our WiFi plans,€ Comcast President Neil Smit said in the December announcement, €œenable us to execute a comprehensive, long-term wireless strategy and expand our focus on providing mobility to our Xfinity services.€

In today€™s statement, Kristin Dolan, Cablevision€™s senior executive vice president of product management and marketing, called WiFi a €œsuperior approach to mobile data€ and said that cable providers are best positioned to build the €œhighest-capacity national network.€

The relationship between the cable companies and Verizon, which has morphed from rivals to partners, has a number of parties€”from consumer advocacy groups to wireless carriers, including T-Mobile and Sprint€”concerned on a number of fronts. One is that a decrease in competition will lead to fewer options and higher prices for consumers. On May 16, nine mayors from upstate New York wrote to the Federal Communications Commission (FCC) saying they feared the deal would €œdeter any expansion€ of Verizon€™s fiber-optic FiOS network in their communities, thus €œkilling thousands of jobs and exacerbating the digital divide.€

Verizon CFO Fran Shammo, speaking at a JP Morgan Chase conference May 16, offered some color on Verizon€™s thinking about FiOS.

€œEach and every quarter, we continue to increase the profitability of FiOS. I have said before that our sweet spot is between 180,000 and 200,000 net adds a quarter, which allows us to grow, but it also maintains our expense level where we want it,€ he said. €œSo, we are not spending a lot of overtime and additional capital to connect up to new customers.€

He added, €œThere is a very long runway for FiOS. We have to do a better job in discipline of price increases, and I think that you€™ll see us do some price increases here over the next two quarters to offset the content increase, and that will also contribute more profitability to the bottom line.€

In the same conversation, Shammo said he was €œvery, very confident€ that the FCC would approve Verizon€™s deal with the cable companies.