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Wi-Fi Networks: A New Frontier for Cable Operators

Fri, 11/04/2011 - 1:35am
Mike Robuck

Outdoor Wi-Fi is red hot as cable operators look to reduce churn.

Outdoor Wi-Fi is the new black when it comes to data services for cable operators.

Not only does Wi-Fi reduce customer churn in the face of increased competition from telcos, it does so by leveraging the existing DOCSIS plant while laying the groundwork for new revenue services in the future.

Cablevision in NY MetroThis year, Shaw Communications announced it was forgoing its LTE network deployment in favor of a wireless mesh Wi-Fi network that will launch in the spring. Time Warner Cable also embarked on its Wi-Fi network roadmap with a large-scale deployment in the Los Angeles area that also included the launch of its fastest DOCSIS 3.0 wideband service.

BelAir Networks chief technology officer Stephen Rayment said there were four primary reasons for cable operators to get on board the Wi-Fi bandwagon that Cablevision first hitched up in 2008.

“The most important one is subscriber retention,” Rayment said. “The competitive scenario with Verizon and adding mobility to the suite of residential broadband was what originally drove Cablevision in terms of doing Wi-Fi. Number two is the new revenue opportunities for the enterprise-oriented Wi-Fi for SMBs (small- to medium-size businesses) and venues, and that’s just starting to roll out.

“The third, and this one is down the road, is additional revenue opportunities from advertising, while the fourth reason is delivering mobile video content using these networks.”

When it comes to building Wi-Fi networks, Cablevision pretty much wrote the book, and now other cable operators are copying from those pages for their own Wi-Fi builds. Cablevision may have raised a few eyebrows in 2008 when it said it was embarking on a Wi-Fi network build-out, which reportedly cost $300 million, but the nation’s fourth-largest cable operator has a consolidated footprint in the New York metropolitan area, with a large number of subscribers moving about in high-traffic areas.

Kevin CurranKevin Curran, Cablevision’s senior vice president of wireless product development, said Cablevision laid out its network plans after doing some initial modeling using standard industry codes to find locations where customers would want to access the company’s Optimum WiFi service.

“For our outdoors network, we built tens of thousands of access points in 20 months, but we first looked at where certain types of entities were,” Curran said. “For instance, we know restaurants are always good places. We know downtown areas with benches outside are good areas. We looked at marinas, and we looked at parks and schools, and then we placed access points in those locations where we thought people would use the mobile Internet.

“So location is always the first thing I talk to people about. Make sure you do a lot of work on the good locations, and try not to limit your locations where you have plant, because as customers come to rely on this, they’re going to want the service in places where they can sit down and have high dwell time.”

Out of the starting blocks, Curran said Cablevision overlaid areas where it had its existing DOCSIS plant built.

“Initially, you want to do the easiest part first, so you go put it up on your own plant. Most of this was hung on an aerial basis on our plant. Then you go in and fill in where you might not have plant to make sure that customers get a strong signal,” he said. “The second thing I tell our MSO friends is that because Wi-Fi is unlicensed spectrum, it does introduce a lot of challenges. We’re continually on the leading edge with our monitoring and surveillance, so we understand what is happening at the point of customer interface and can overcome the challenges associated with unlicensed spectrum.”

KEEPING UP WITH DEVICES
The third area that Curran said he speaks to other cable operators about in regard to Wi-Fi networks is devices. With a small army of Internet-connected smartphones and tablets being purchased by subscribers, cable operators have to be aware of how each device functions on their Wi-Fi networks.

“When we got into this in 2008, we basically said it was a service for someone to sit down with their laptop, and at that point, laptops accounted for something like 80 percent of the usage on the network,” Curran said. “Now more than 50 percent of devices on the network are smartphones. Smartphones have very different characteristics in terms of power, in terms of antennas and some other things. We’re now looking at how we fine-tune the network, because we’re not just serving high-powered laptops. Laptop users do a lot of content creation, a lot of uploading versus the short, bursty traffic of a smartphone, where they’re monitoring social media and things like that.

“That’s a huge challenge, the fact that we don’t control these devices. As soon as someone walks out of a store with a Wi-Fi device, they expect to use it on our network. Even though Wi-Fi is a standard, they all behave very differently in terms of their antennas, in terms of how they process and how they authenticate over a network. As a new device comes out, we put it through some tests to make sure it works seamlessly with our authentication process, so you have to keep up with devices.”

Wi-Fi devices are also top of mind for Shaw as it builds its own Wi-Fi network.

Dennis Steiger“We’re looking at taking the top-10 consumer devices and profiling them against our network to make sure they work as best as possible,” said Dennis Steiger, group vice president of engineering for Shaw. “Obviously, you can’t get to every device out there, but the network we’re building is pretty flexible that way. It’s not designed to work with only one type of client, so we don’t expect too many big issues there.

“We’re seeing an explosion of tablets like everyone else is, and those are the kinds of devices that really add value to Wi-Fi. You really don’t need that much speed in a smartphone because you’re probably not going to watch an HD movie on your smartphone. In order for us to make sure we offer the value that we intend to, it’s really important for us to keep track of the types of devices connecting to the network.”

While Cablevision was able to work with BelAir Networks on deploying access points across a largely contiguous area, Shaw is faced with deploying Wi-Fi across a far-flung footprint in Canada. Shaw, which picked Cisco as its vendor, has a test slated for December in Calgary and Edmonton before rolling it out next year to communities that have fiber, which Steiger said was about 98 percent of its customer footprint.

“It’s going to be a little bit of the live and learn,” Steiger said. “The beauty of the Wi-Fi network is it isn’t something that we design at the corporate office in Calgary. It’s something where we maybe standardize the technology and the design standards there, but to a large extent, it will be planned and built in our regional offices and our branches. They’ll know best where to build Wi-Fi networks in their communities.

“It begins with defining the objective for what the network build is. For us, that’s building a network that adds a lot of value to our residential customers’ service and making that available outside of the home. I think it is going to be different in each community where we bring value. In some communities, we will blanket the entire community so they’ll be able to pull out their devices anywhere in those places. In other places, it doesn’t make sense to do that.”

Steiger said Shaw’s end goal is to offer Wi-Fi services that mirror subscribers’ home data tiers, whether it is 100 Mbps on the downstream or 10 Mbps.

Wi-Fi SharingWI-FI TO PLAY A KEY ROLE IN BROADBAND STRATEGY
Time Warner Cable CEO Glenn Britt said earlier this year that broadband would become the company’s “anchor service” going forward. Wi-Fi will play a key role in Time Warner Cable’s broadband strategy.

“Our strategy fundamentally is we want to take our broadband product that is currently in the home and broaden it so that our customers can get broadband access whether they’re in their homes, offices, or whenever they go outside of their home,” said Mike Roudi, senior vice president of mobile services at Time Warner Cable. “So we think about Wi-Fi as the ‘on-the-go’ piece of our broadband strategy. We think it will lend itself very well to adding more value to Time Warner Cable’s broadband customers by making the Internet more accessible at all of the places that they like to go to.

“If you think about Los Angeles, it’s a great Wi-Fi market from a people standpoint. Meaning it’s a very outdoors-oriented culture, there are lots of people gathering at beaches and cafes, and there are a lot of really great downtown areas that have a lot of walking foot traffic, so we thought it would be a really good market to frankly test our hypotheses on how Wi-Fi will help our business.”

50% Wi-Fi Traffic on SmartphonesTHE FUTURE OF WI-FI
Hillol Roy, associate fellow at IBB Consulting Group, said that he expects to see more Wi-Fi-based roaming arrangements similar to the one that Comcast, Time Warner Cable and Cablevision struck in the New York metropolitan area. Subscribers there are able to jump on another cable operator’s Wi-Fi network by using their own cable operator’s authentication process.

With each cable operator having its own territory, it makes sense to allow roaming across each other’s footprints to provide a more expansive mobile Internet experience.

“We hope to take this thing very, very far in terms of letting people have Wi-Fi access outside of our footprint,” Cablevision’s Curran said. “Right now, we roam with Time Warner Cable and Comcast, and we get lots of comments on our website where someone was in Atlantic City and was able to use Optimum WiFi, or they were in Manhattan Beach, and now they see Optimum WiFi.”

Curran said Cablevision has more than 8,000 small- to medium-size business customers for Wi-Fi services, as they signed up for Cablevision’s Optimum Business voice and data offerings.

As for revenue models, Curran said that while there’s potential for location-based ads, Cablevision wants to keep the service uncluttered for now.

“We’re asked a lot by our cable friends, ‘Where’s the revenue plan?’” Curran said. “And while there are going to be opportunities for revenue down the road, we have no plan to let other users on the network or use the network for advertising. We want to have a very pure mobile Internet for our customers when they leave their home or office.”

Time Warner Cable’s Roudi said that after some internal debate, the company decided to allow non-subscribers onto its Los Angeles Wi-Fi network. Roudi said Los Angeles was one of the top-five tourist destinations in the nation, which helped the company decide to charge $2.95 for one hour, $6.95 for a day, $19.95 for a week and $49.95 for a monthly plan.

Wi-Fi Access Points“This was something that we frankly debated a bit upon, but we decided to allow non-Time Warner Cable customers to have access to the network for a fee, primarily because we’re operating in L.A., and L.A. is a very high tourist market,” he said. “If I were deploying in a different market, I may make a different decision there. We think this is an opportunity for us to generate some amount of revenue – and frankly good will.”

Steiger said Shaw may opt to allow third-party users on its Wi-Fi network at some point, but for now, the focus was on building the network and studying how subscribers use it.

“In the long run, we really want to change the paradigm of mobile metro data networks to one that is quite different than what exists today,” Steiger said. “Today, when you think of it, you think of it as slow speed, you think of it as very expensive and you think about a telephone company. We want our customers thinking of it as available across the cities, it’s free and it’s very high-speed.”

Roy said cable operators could also cash in by offering a premium service that is more secure and faster, while BelAir Networks’ Rayment said there are also opportunities for 3G and 4G backhaul for cable operators.

After provisioning train stations and commuter parking lots, Cablevision is working on additional Wi-Fi agreements in New York and New Jersey to offer the service on trains. Curran also said supermarkets were interested in lighting up Wi-Fi networks.

For now, Time Warner Cable, Shaw and Cablevision just want to make sure they’re offering the best Wi-Fi experience possible for their respective subscribers.

“We’re just studying the impact and watching how our customers use it and continue to expand their use of it, how we can make it easier to use and make sure we’re in all of the right locations,” Curran said. “We think we should get the majority of our customers using this. Everybody else is going to metered rates, and this is at no incremental cost, and it allows for very data-intensive applications like streaming video.”

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