An Ignoble Experiment

2. Cox, Mediacom plot broadband speed increases, as DOCSIS 3.1 rebranded as Gigasphere

LOS ANGELES--Cable industry's top executives bemoaned the ongoing authentication issues that plague TV Everywhere apps, complained about rising programming costs, and admitted to the growing threat of over-the-top players. However, they also said that without the underlying broadband infrastructure of the cable companies, OTT players cannot succeed.

From left, A&E Networks' Nancy Dubuc, Suddenlink's Jerry Kent and Time Warner Cable's Rob Marcus debate some of the challenges facing the cable industry during The Cable Show's opening session. (Photo by Sue Marek)

"Netflix (NASDAQ: NFLX) would not exist without the cable industry," said Jerry Kent, Suddenlink Communications chairman and CEO, during the opening session of The Cable Show held here this week. "There are a lot of companies that are in existence today because we spent time building the Internet and broadband business," Kent noted.

But not everyone views the OTT players as a threat. Rob Marcus, chairman and CEO of Time Warner Cable (NYSE: TWC), said that he believes that the onslaught of OTT players just makes the high-speed broadband connections that cable MSOs can offer even more appealing. "In video there is potential for competition, but it drives us to be better than we are," he said.

A similar philosophy was echoed by John Skipper, president of ESPN and co-chairman of Disney Networks. However, Skipper called upon the cable industry to do a better job of selling its offerings to consumers. "Shame on us if we don't work to sell the value of a pay subscription and a triple-play. We are allowing them [OTT players] to set the tone of the conversation. We should be saying we have a better product."

Skipper also called for a tighter partnership between programmers and distributors, noting that initiatives like TV Everywhere are not progressing as quickly as they should and that's impacting the customer experience.

In fact, improving authentication on TV Everywhere services was a recurring complaint among the programmers on the panel. "I wish our cable partners would look at how to make the customer experience better," said Nancy Dubuc, president and CEO of A&E Networks. "That part of the partnership needs to be solidified."

Turner Broadcasting CEO John Martin even called for a "call to action" over authentication. "Authentication is a barrier to usage," Martin said. "If you poll most people in audience and ask them their user name and password, most people don't know it."

In fact, Martin even admitted that he doesn't use TV Everywhere because he doesn't know all his passwords and user names. "I have three homes with three different cable providers and I don't know any of them. I don't have TV everywhere because I can't use it."

While Time Warner Cable's Marcus agreed that TV Everywhere authentication needs to be improved, he still touted the strides his company has made with its TV Everywhere app, called Fan TV. "I agree that authentication must be easier but the early returns are good …. We had 1 million unique users access our content on ways other than a set-top box last month."

Another hot-button issue that the cable execs debated was the increasing costs of programming, which in turn is causing consumer cable rates to rise. Marcus said that Time Warner Cable charges its customers the equivalent of 20 cents per viewing hour for the content it delivers, a price that he believes is fair. "We charge customers 20 cents a viewing hour. That's well worth the price of admission," he said.

However, Suddenlink's Kent said he is fearful that the cable operators may soon price the average household out of the market. "I think we will reach a tipping point and price people out of the market," he said, adding that he's not advocating a la carte pricing but instead more affordable packages. "People should have more choice than everything in an expanded basic bundle. If we don't do that, cable operators will have to raise prices," he said.

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By Jim Barthold

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3. Cable execs say Wi-Fi is complementary to cellular ... for now

A pair of cable MVPDs plan to hike broadband speeds to meet customer demand and negate advances by competitors such as Google (NASDAQ: GOOG) Fiber, AT&T (NYSE: T) GigaPower and CenturyLink (NYSE: CTL).

Cox Communications President-CEO Pat Esser told Bloomberg that his company is "working on our road map now to bring gigabit speeds to customers this year" to meet the Google Fiber and AT&T GigaPower challenge head-on.

Mediacom, on the other hand, is not going quite that fast, but it is going faster in its franchise areas in primarily secondary U.S. markets. The company announced an overall speed increase for three tiers of service, the eighth such upgrade in the last decade. Additionally, Mediacom recently announced a 305 Mbps tier in Cedar Rapids, Iowa.

The across-the-board increases, which drove standard packages from 30 Mbps to 50 Mbps, premium speeds from 50 Mbps to 100 Mbps, and 105 Mbps to 150 Mbps, came about "because of consumer demand and the increased use of bandwidth," Mediacom spokeswoman Phyllis Peters told the Des Moines Register.

The changes show that the gig is up for more than just bandwidth in the cable industry. Cable, which has never been known for creating signature names that roll off consumer tongues, is hoping to change that by coining "Gigasphere" to be its consumer-facing brand for what had previously been known as DOCSIS 3.1.

Cable marketers and communications executives have been tasked with developing guidelines for the proper use of Gigasphere while DOCSIS remains in se by CableLabs, cable engineers and the technical community, a press release issued by the NCTA said.

"Gigasphere stands for incredibly fast access to the Web, the world and our lives," NCTA President-CEO Michael Powell said in a press release. "It breathes life into the breadth, scope, scale, opportunity and impact of this next-generation technology."

For more:
- Bloomberg has this story
- the Des Moines Register has this story
- and the NCTA has this press release

Read more about: Mediacom, cable14
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By Sue Marek

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4. L.A. Mayor Garcetti tells Time Warner Cable to cut deals on Dodgers broadcasts

LOS ANGELES--Cable MSOs touted the rapid expansion of their Wi-Fi footprints but stopped short of saying that they envision a day when their wireless networks may be competitive to cellular operators.

At The Cable Show here representatives from Bright House Networks, Cablevision (NYSE: CVC), Comcast (NASDAQ: CMCSA), Time Warner Cable (NYSE: TWC) and Cox Communications touted the CableWiFi Alliance's growing footprint of 250,000 hotspots nationwide.

Of course, that number will grow even larger with Comcast's announcement that its XFinity WiFi will reach 8 million hotspots by year-end, blanketing 19 of the country's 30 largest cities with WiFi access.

Despite that growing footprint, the cable execs insisted that they do not plan to use Wi-Fi network to compete with wireless operators for voice and data services. Leo Cloutier, senior vice president of strategy and business development at Bright House Networks said that his company views its Wi-Fi footprint as a complementary offering that helps wireless subscribers manage their data usage so they don't go over the data caps imposed by wireless carriers.

That sentiment was echoed by Cablevision Senior Vice President for Video Product Management Brad Feldman. "We are using this to help us differentiate from the telcos," he said. "We are investing in Wi-Fi and we'll see where it goes. But we are not a direct competitor."

Tom Nagel, senior vice president and general manager of wireless services at Comcast, added that while the cable companies have built a compelling network of Wi-Fi hotspots and it can do a lot, it is not a cellular network. "Wi-Fi is not a licensed technology and it will never be. It's about nomadic sessions. They are very different."

But there are companies such as Sprint (NYSE: S) MVNO Scratch Wireless that are actively going after cable companies in hopes of getting them to leverage their Wi-Fi footprints to compete against cellular carriers.

Scratch co-founder and CEO Alan Berrey revealed during a recent webcast presented jointly with Multichannel News that Scratch is in "active discussions" with cable operators. He said pilots of a tailored "Wi-Fi First" service could begin this summer, followed by actual deployments in the fall.

Nevertheless, these cable executives were adamant about their services being complementary. And they sounded a bit like wireless company executives, particularly when the topic of spectrum was broached. The members of CableWiFi Alliance all bemoaned the lack of available spectrum but said they were encouraged by the FCC's recent decision to allocate 100 MHz of spectrum in the 5 GHz band to unlicensed spectrum. "Spectrum is the core building block of anything you want to do wirelessly," said Nagel, who praised the FCC's move. However, he added: "We believe more needs to be done."

However, the cable operators do have more in mind for their Wi-Fi hotspot network than just a convenient way for consumers to offload their cellular data traffic and watch videos over their iPads.

Nagel described how Comcast is outfitting public spaces such as shopping centers and sporting venues with Wi-Fi hotspots as well as giving hotspots to business customers for no charge as a value-added feature. The company also is providing residential customers with gateways that have a second Xfinity signal that is separate from their own private Wi-Fi that can be used for visiting Xfinity customers. The company said that currently about 54 percent of Xfinity's Wi-Fi usage in neighborhoods travels over the second signal, or SSID.

For more:
- see this Comcast press release
- see this CableWiFi Alliance release

Read more about: CableWiFi Alliance, Comcast
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By Jim Barthold

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5. Analysts: Watch out for Dish's OTT ambitions, but business model is unclear

Viewing the home team on television on any given day may not be a Constitutional right--as Philadelphia sports fans with satellite service have known for years--but it is a potential political football.

Los Angeles fans want to watch their Dodgers play baseball, and they don't necessarily want to switch service providers to Time Warner Cable (NYSE: TWC) to do so. The city's mayor took advantage of the presence of The Cable Show in the City of Angels to put across that point during a keynote address.

"I'm calling on all participants to resolve this so we can get our hometown Dodgers," Mayor Eric Garcetti said, according to a story in Deadline. "We love the Dodgers and we love Time Warner."

Garcetti conceded that his office cannot legally do anything to resolve the matter which could come down to which one the city's residents love the most--the Dodgers or Time Warner Cable, which is enmeshed in one of the more public sports carriage disputes in recent times. The MSO's local channel SportsNet LA bought the rights to televise the games for a reported $8.35 billion and is, according to most reports, playing hardball when it comes to selling the broadcasts to competitors.

The cable company, meanwhile, hasn't done anything to endear itself to fans. In fact, it's reportedly become more aggressive about urging non-TWC subscribers to join the cable fold with an advertisement that suggests non-subscribers should "switch today and never miss a game."

Analysts and other listeners on hold during the MSO's recent first quarter earnings call were also bombarded with messages about the value of a TWC subscribership to view Los Angeles sports.

"Los Angeles sports fans are growing weary of getting entangled in the stalemate of TV negotiations," USA Today Sports featured columnist Robert Pace summed in an opinion piece for the Bleacher Report. "Why should consumers be subjected to the hassle of switching providers over one channel? It doesn't take a genius to decipher that the onus is on the provider and channel to find resolution, not the paying consumer."

For more:
- Deadline has this story
- ABC News has this story
- the Los Angeles Times has this story
- and Bleacher Report has this story

Read more about: Time Warner Cable
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By Sue Marek

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