The cable operators that formed the innovation technology joint venture with Verizon Wireless late last year have been tight-lipped to date on the timeframe and type of products they’re working on, but Time Warner Cable did at least somewhat address the former question during yesterday’s first-quarter earnings call.
“This is something that will evolve over time, but our hope is that before year-end, we'll have some additional features to talk about,” said Time Warner Cable President and COO Rob Marcus on the conference call.
Last month, Time Warner Cable and Verizon Wireless started offering cross-promotional bundles in four markets: Raleigh, N.C.; Kansas City; and Columbus and Cincinnati, Ohio. The current marketing effort between the two includes a $200 prepaid debit card for customers that choose to add Verizon Wireless’ service and upgrade at least one of their Time Warner Cable services.
“Over time, what we envision is that we will focus less on bundled discounting, which is effectively what the gift card is, and more on product enhancements that can only be experienced if a customer is a subscriber to both services, and really, that's the focus of what the technology JV is working on,” Marcus said. “The goal, while we're not prepared to announce any of these product enhancements today, would be to create value out of the linkage and the cooperation of the two companies, and really all of the cable companies and Verizon Wireless. I think the two pieces, the agency agreement and the technology joint venture, are intimately related to one another because the value proposition rests in part in what we come up with on the JV side.”
The technology JV was formed to foster the development of technology to better integrate wireline and wireless products and services. The joint operating entity is based in Philadelphia, which is where Comcast has its headquarters. It’s 50 percent owned by Verizon Wireless, while Comcast, Time Warner Cable and Bright House own the other 50 percent stake.
Time Warner Cable Chairman and CEO Glenn Britt said his company is very enthusiastic about its partnership with Verizon Wireless, “and I think that will be good for us, assuming that it gets all the way through the regulatory approvals.”
Verizon Wireless’ $3.9 billion purchase of AWS spectrum from Comcast, Bright House Networks and Cox Communications still needs to pass regulatory muster with the FCC and Department of Justice.
In theory, Comcast, which started offering joint marketing promotions with Verizon Wireless early this year, could offer more insight on the joint venture products during its first quarter earnings call on May 2.
Other first quarter highlights and news:
- DOCSIS 3.0 – Time Warner Cable may have been slow out of the DOCSIS 3.0 starting blocks compared to the five other top cable operators in the nation, but it has more than closed the gap. Boosted by various promotions, Time Warner Cable added a record number, 73,000, DOCSIS 3.0 subscribers in the first quarter to bring its wideband total to 218,000 residential customers.
Marcus said roughly two-thirds of the D3 subscribers took its Extreme Internet tier, which features 30 Mbps on the downstream and 5 Mbps up, while the remaining one-third have signed on to use Ultimate Internet (50/50). All told, Time Warner Cable has DOCSIS 3.0 rolled out to 85 percent of its footprint, which was up from 76 percent in the fourth quarter. Time Warner Cable expects to have its DOCSIS 3.0 launches largely completed by year’s end.
- Wi-Fi – Time Warner Cable has 2,000 hotspot access points live in its Los Angeles system, and Marcus said the company was on track to have 10,000 by the end of the year. Time Warner Cable subscribers in the New York City area have access to 20,000 Wi-Fi hotspots through roaming agreements with Cablevision and Comcast.
“And the Wi-Fi hotspots to New York City and L.A. are all using a common authentication platform, so eligible TWC customers from anywhere in the United States will be able to access the TWC Wi-Fi hotspots in New York City and Los Angeles, no matter where they live,” he said.
- Aereo TV – During the Q&A session of the conference call, Britt was asked about Aereo TV, which launched a service that features live local TV feeds to iPhones and iPads in the New York area earlier this year. Cable operators are tracking Aereo’s efforts because it has challenged laws governing the retransmission of local broadcasts.
“Aereo, I think, is a very interesting idea,” Britt said. “I have no idea whether the courts will find it to be legal are not, but it's certainly something we're looking at. Obviously we've been quite interested in the whole retransmission front, and so if it's found to be legal not paying retransmission consent, it's a very interesting thing.”
- Essentials Broadband – Earlier this year, Time Warner Cable reentered the usage-based broadband billing arena with a trial in south Texas. The optional Essentials Broadband tier caps monthly usage at 5 GB a month, but customers receive discounts if they stay under the cap. In 2009, Time Warner Cable kicked the tires on consumption-based billing in four markets but backed off after consumers and elected officials protested the move.
“We announced that people there who want to save money could buy a tier that had a consumption element to it, but we retained our unlimited tier with no cap,” Britt said of Essentials Broadband. “So that this was not in any way coercive, people who wanted to save money could. People who wanted to keep what they had have kept it, and they still have unlimited [bandwidth]. So our plan is to roll that out further across our footprint as the year goes on.”