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MSOs: We're Not Building National Biz Net

Carol Wilson
1/28/2016

MIAMI -- What was once described as a national "cable first" initiative to unite major operator efforts to court enterprise customers is actually just an effort to automate the processes by which those companies order services from one another, to reach customers outside their regional footprint, according to two of the participating companies.

Speaking here Wednesday at the Metro Connect event, executives from Charter Communications and Cox Communications said meetings hosted by Comcast Corp. in December weren't ever designed to create a national cable footprint by cobbling together the regional cable operations. (See LR Cable Daily Test Dec 2.)

"I think that got a bit overblown," said Don Detampel, EVP of technology and president of Commercial Services for Charter Communications Inc. , who attended the meeting hosted by Comcast in Philadelphia.

Cable operators have been doing what's called "Type II" business, or the reselling of their access lines to other carriers under FCC rules for unbundling access, for some time, he added. "Comcast was probably a little bit later to the game in the enterprise space and their intent was to get the Type II process between the companies working more smoothly."

Most incumbent telcos and competitive carriers have automated their processes to make it easier for companies to order Type II circuits, he added. The cable initiative is intended to make the cable processes more efficient through automation and the meeting was designed to agree on how to best do that.

Jeremy Bye, VP at Cox Communications Inc. , confirmed Detampel's assessment, adding that cable operators have trailed the industry in automating their processes and need to do more. But any effort in that area wouldn't just be aimed at other cable operators, he added. "It is meant to be very inclusive, so other large [network operators] would be part of that effort as well."


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Bye also mentioned the possibility that a cable operator could address the enterprise market by becoming a service aggregator of some type -- whether that is aggregating ordering and billing of services regardless of who is providing the underlying infrastructure -- as Granite Telecommunications LLC does today on a national basis.

Their comments came at the end of a panel discussion on cable's increased role in the metro networking space, as it steps up its business services game. While not directly addressing the issue of whether cable companies are honoring a longstanding "gentlemen's agreement" to stay within their regional footprint and not compete with each other, the cable executives did say that they don't often find logic in spending capex dollars to overbuild facilities outside their regions, but that the situation could change.

"It's easier to leverage existing operating models like Type II, that are not relative to capital, to reach those out-of-market connections," said Thane Storck, group VP of Carrier Services for Time Warner Cable Inc. (NYSE: TWC). One exception to that might be fiber deployments to support cell towers or small cells at the periphery of a specific cable footprint.

The cable operators also said they didn't expect to enter the dark fiber market any time soon. Detampel says that would require a major overhaul of Charter's existing fiber networks to support the markets demanding dark fiber such as the CRAN, or consolidated radio access network, market. As part of the TWC merger process, Charter is committing $2.5 billion to reaching new commercial customers with fiber and it's unlikely the company would go further in committing capital to overhaul existing fiber routes, he said.

— Carol Wilson, Editor-at-Large, Light Reading

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cnwedit
cnwedit
1/28/2016 | 10:28:22 AM
Re: Backpedaling
What I was hearing in Miami from Cox and Charter was that Comcast wants to do more automation among the cable companies - that they aren't nearly as good at automating Type II sales as most other telecom carriers because they haven't been at it nearly as long. For CLECs, that process is table stakes - they have to had it to get into business and they've been doing that for 20 years now. Telecom, pretty much the same. But cable isn't as advanced, at least according to what was said at Metro Connect. It's possible they are trying to fix that.

So we may have to see how this plays out. There could be regulatory or legal concerns to a "cable first" model, and that has prompted folks to back down. Or this may be the misunderstanding that was characterized in Miami.
msilbey
msilbey
1/28/2016 | 10:16:48 AM
Backpedaling
That's a big stepdown from the way Comcast talked about this effort in December. Cablecos have been trying to smoothe out the wholesaling process for some time, and this doesn't sound much different.

Also interesting to hear these folks back away from the "cable-first" pitch. Back in December, when asked how important the joint cable story was, Comcast's Glenn Katz said:

"It's very important. It's very very important. Because first of all there's not a lot of cable penetration in the large enterprise space because of multiple reasons. If it was a telco like AT&T and Verizon, they're not going to resell our stuff. So thery're going to try to put in whatever they can. And they're going to try to continue to put in DSL and if you're a non-facility based managed service provider, you're going to go to the customer and you're going to say this is an important point . You're going to say look I can provide you cable first. Alright but there's construction. Well I can't absorb the construction. I'm just a reseller, so but I'll provide you with DSL, or two DSL lines or three DSL lines that may equal this cable line. So that's what's happening in the industry."
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