Competitive cable networks ... if you build it, will they subscribe?
Google Factor: 1,800
At face value, the concept of competitive cable service appeared sure-fire a couple years back. After all, MSOs are traditionally slow to move into new technological territory, unless a competitor or related threat is hot on their trail. It took the awakening of the RBOCs to DSL to push cable modem service into the MSO mainstream.
The VC well has since gone dry, and the first movers are either gone, retrenched or restructuring.
But the competitive cable model lives on, albeit in a different form than originally conceived. Denver-based Wide-OpenWest is one of the overbuilders remodeling its business to survive in this new climate, and it's confident its competitive service has a place in the market. It's just a smaller, more regional place than it had originally expected.
Where the company once had visions of expansion into multiple cable markets, a lack of cash and support for expansion has meant that WOW has trimmed its focus to a couple of areas. First, it's busy readying a competitive HFC network in the Denver area, where it established a real presence. WOW has secured franchise agreements in 13 suburban cities in the Denver area, and is quickly moving toward offering voice-over-IP services across the region. It calls the service, based on VoIP technology from Gemini Broadband Voice, WideOpenTelephone and will offer customers a flat-rate of $35 a month for 1,000 minutes of intrastate and state-to-state calling. WOW also hopes to offer international calling some time in the near future.
WOW's second area of focus, though, is what sets this competitive cableco apart from the others. Earlier this year, responding to market pressures to grow despite a constricting financial market, the company made a play to join the incumbent establishment by acquiring cast-off cable systems put up by SBC-owned Ameritech. The systems are branded under the americast name, and allow access to more than 310,000 households in Chicago, Detroit, Columbus and Cleveland. The systems sale is in the process of closing, and franchise transfers have already been completed in those communities.