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Cablevision Expects Lower WiFi Bill

Jeff Baumgartner
11/3/2009

Cablevision Systems Corp. (NYSE: CVC)'s big WiFi deployment is ahead of schedule and is 15 percent under budget so far, executives said on today's earnings call.

Under the original plan, Cablevision was to spend about $300 million on the WiFi outdoor buildout (which also included a Docsis 3.0 network deployment) over three years, equal to about $70 per home passed. (See Cablevision High on WiFi and Cablevision Plays WiFi Card .) Cablevision's about 19 months into that combined project.

Cablevision COO Tom Rutledge did not specify a new timeline, though the MSO just added Brooklyn, The Bronx, and New Jersey to its list of WiFi-enabled areas. Cablevision has already wired up its entire footprint with Docsis 3.0, starting off with a tier that offers downstream bursts of 101 Mbit/s. (See Cablevision Debuts 101-Mbit/s Wideband Service.)

Cablevision is now shifting attention to indoor deployments, starting with public venues such as Madison Square Garden and Radio City Music Hall (both Cablevision properties) and Long Island's MacArthur Airport.

Cablevision is also trying to get its Optimum WiFi service on the Metropolitan Transportation Authority (MTA) railroad system, but the timing remains unclear because of the bidding process. With that in mind, Rutledge declined to say how WiFi deployments might affect Cablevision's capital budget for 2010. However, Cablevision's third-quarter capex came in at $159 million, $50 million off the year-ago quarter. (See Cablevision Proposes Train WiFi.)

Although Cablevision is using free, complementary WiFi to sweeten the pot for its cable modem subscribers, it may consider a pay version, as well. "We continue to see more and more devices... that have WiFi connections in them, so we think that there may be an opportunity to monetize that ultimately in the future," Rutledge said.

Other tidbits from Cablevision's third quarter results:

  • Although Cablevision's forthcoming Remote-Storage DVR (RS-DVR) service will initially be tied to TVs, it appears that it will also encompass some cross-platform, TV Everywhere-like attributes. "The network DVR strategy that we have ultimately is a unicast server strategy," Rutledge said. "We envision a day when our architecture will provide products on multiple devices," he added, referencing not just TVs, but PCs and handsets, too. (See Supremes Stand Clear of RS-DVR Case.)

  • Cablevision's video base declined by 27,000 in the third quarter. Rutledge attributed that not to competition, but to typical third-quarter trends and slower growth in urban centers that are seeing high unemployment and vacancy rates. However, Cablevision still managed to add 19,000 high-speed Internet subscribers, and 34,000 VoIP customers. (See Cablevision Posts Q3.)

  • Advertising appears to be in the rebound, with total revenues in the category up 6 percent versus the second quarter, spurred by stronger political advertising. Rutledge said early results from Cablevision's Optimum Select interactive advertising campaign have been solid. The first, with Gillette, offered 30,000 product samples, and all were requested by the time the two-week campaign was half over. (See Cablevision Gets Interactive.)

  • If all goes to plan, Cablevision's Madison Square Garden unit should become an independent public company "on or about year-end," MSG vice chairman Hank Ratner said. In the third quarter, the MSG property, which includes the New York Knicks and Rangers, had revenues of $162 million, up 1 percent year-on-year. (See Cablevision Board OKs MSG Spinoff .)

— Jeff Baumgartner, Site Editor, Cable Digital News

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