Cablevision, a cable triple play pioneer, announced plans to launch a broadband wireless network covering their New York metro footprint within two years. The new network will be based on Wi-Fi mesh technology and will be offered at no charge to existing Cablevision customers and for a fee for non-Cablevision customers. Cablevision has about 3.3 million customers and an industry leading broadband penetration rate of 50%. This launch follows a trend by other smaller cable MSOs and broadband service providers, who see broadband wireless networks as a value add opportunity for existing customers.

This is not just about broadband Internet access though. For example, Multichannel News describes a possible scenario offered by Cisco, where “… a Wi-Fi mesh network could allow a cable operator to offer subscribers ubiquitous connectivity in a metro area for any service. For example, someone watching TV could choose to transfer the video signal to a cellular phone and walk outside if Cisco’s Cable Service Mesh is deployed in the subscriber’s neighborhood.” Applications like that could provide tangible competitive advantage. At least until Verizon integrates a similar service utilizing FiOS and LTE. With announcements like this and the recent WiMAX joint venture featuring prominent cable companies, it appears as if cable is getting their wireless mojo going.

Most cable companies these days are blaming Verizon FiOS and other telecom and DBS competitors for lackluster video subscriber additions. Yet Cablevision, who probably is most exposed to competition from Verizon FiOS in the metropolitan New York market is bucking the trend. Their most recent quarterly report shows actual growth in all video subscriber units, including basic cable. In fact Cablevision leads all cable companies in terms of penetration for desirable services, despite the competition from Verizon. The numbers are impressive:

• Digital Cable penetration – 84%
• High Speed Internet penetration - 49%
• Voice Telephony penetration – 34%
• HD penetration of Digital Subscribers – 40%

The good news pushed their stock price up more than 7% in one day. It all begs the question, what’s their secret? How have they been able to stand straight up to Verizon, where others are failing? Perhaps their push of value add services like deploying free Wi-Fi hotspots for their broadband customers throughout their footprint, or caller-ID on the television is helping. Cablevision also extended it's triple play bundle promotions to all of it's subscribers, not just new ones. Maybe that strategy is paying real dividends now. Whatever the case, the real test will be whether they can sustain these efforts. Verizon certainly will be taking notice, and will respond. Can Cablevision continue to brush off Verizon’s challenge? Stay tuned.

Cablevision is now offering small and medium business customers up to 12 voice lines. The expanded offering is under their business Optimum Voice portfolio and offers flat-rate, unlimited local and long-distance calling, Caller ID, call waiting and enhanced voicemail. Cablevision also bundles business broadband packages of up to 30 Mbps downstream and 5 Mbps upstream.

Cablevision announced a new service that allows subscribers to view video on demand titles the same day as their release on DVD, provided they purchase the DVD. The new service is branded “Popcorn DVDs On-Demand,” and Cablevision has partnered with Popcorn Home Entertainment for the new service. Each VOD/DVD title will be priced at $19.95 (between $9.95 - $15-95 for older titles), plus shipping. Cablevision subscribers will be able to watch the title immediately on VOD, and will receive a DVD of the same title in the mail.

Once the purview of IPTV operators only, caller ID display on the television is increasingly catching on with cable MSOs. Cablevision is the latest MSO to announce (discussed towards the bottom of the page) its launch. Cablevision has not decided whether to charge for the service

Cablevision’s impressive triple play growth got a reality check last quarter, probably courtesy of Verizon FiOS. Analysts have come to expect impressive growth numbers from Cablevision, but their latest quarterly report reveals basically flat growth. Cablevision also reduced expectations for growth throughout the rest of the year. Their video growth had the smallest gains, suggesting that potential video subscribers are exploring other options. A telling number reported by Cablevision and encouraging for them (and all triple play providers) is an ARPU figure of $121.

Verizon is aggressively marketing FiOS in the New York City metropolitan area and in Long Island, which is Cablevision’s home turf. These Cablevision numbers suggest that Verizon’s efforts are starting to be felt by their competitors. The post previous to this one reveals Verizon’s early penetration in Massachusetts markets, where they are taking market share from Comcast, RCN, and DBS. In response to Verizon’s efforts, Cablevision has begun marketing triple play bundles with compelling introductory pricing promotions to existing video subscribers. Previously, these bundle schemes were only available to new customers. The competitive reality between cable and telecom is really beginning to show. AT&T, Verizon, and the video efforts of numerous independent operating companies (IOCs) across the country are now beginning to take hold. Conversely, cable competitors are now flexing their considerable telephony muscle. The result is a marketplace where both industries are fighting for long term survival and dominance, with consumers sure to benefit, and the analysts among us acting as spectators to a spirited contest.

In an attempt to upstage their telecom competitors, Cablevision announced an upgrade of their Optimum Voice VoIP service to offer up to four voice lines. Each additional line is priced at $14.95/month. This new service appears to be quite competitive with traditional telecom carriers like Verizon, who typically charge standard rates for each additional phone line into a consumer’s home.

This tactic is right in-line with Cablevision’s overall aggressive voice strategy. They have been quite successful leveraging bundles to gain voice market share, claiming “…nearly a third of all residential voice customers in Cablevision's market…” according to John Trierweiler, Cablevision's senior vice president of product management. Expect Verizon and others to watch this closely and maybe match it.

The much anticipated deadline for the FCC’s integrated cable set top box initiative (officially labeled Commercial Availability of Bidirectional Navigation Devices) has come and gone, and it appears as if Verizon is the biggest winner. The integrated set top box initiative is a mandate from the FCC to try to spur competition for cable set top boxes, by disaggregating the security features from the set top box, and thus making them more suitable for retail distribution through consumer electronics retailers. The new rules went into effect on July 1st and only apply to new set top boxes. Cable providers will now have to offer a separate security card, labeled CableCard by CableLabs, which gets inserted into set top boxes to provide necessary conditional access. The FCC’s thinking is that the current lease model for STBs, employed by most MSOs, is harmful to consumers, whereas these new rules will now allow consumers to pick and choose STBs on their own. The ultimate goal is to create competition for STBs, which hopefully leads to lower pricing and better features. The cable industry argues otherwise, and claims these rules will have the opposite effect.

Verizon was able to gain a waiver from these rules for FiOS video service. In fact the FCC issued a blanket waiver for all multichannel video operators who are either all-digital already, or who have committed to going all-digital by the February 2009 transition deadline for digital broadcasting. This conceivably gives Verizon and other TelcoTV operators who are digital ready, a competitive advantage, because they have one less significant burden which is now faced by their competitors, including Comcast, Cablevision, and other cable MSOs. The FCC also granted conditional waivers to smaller cable companies who can demonstrate that they have placed orders for compliant STBs, but were unable to take delivery before the July 1 deadline.

A Verizon commissioned research study reveals that Verizon subscribers are more satisfied with Verizon, compared with cable MSO customer satisfaction with their respective cable company. Verizon hired an independent research company to conduct the study. A key metric Verizon is touting is likelihood for customers to recommend a telecom bundle to friends. They report 40% of Verizon customers said they were very likely to recommend Verizon bundles to others. Comparable numbers were just over 31% for Cox, 28% for Time Warner, 25% for Cablevision, 24% for Charter and 23% for Comcast.

Other interesting results reveal likelihood to switch providers. A third or more of the customers of Comcast, Cablevision, Cox and Charter, and more than a quarter of Time Warner customers said they were likely to switch providers. By comparison, the research reports that 18% of Verizon customers are likely to switch providers.

Cablevision announced today their intention to add 15 additional HD channels to their iO: Interactive Optimum digital service. The additions will bring their total HD lineup to 40 channels. The channels come from their own subsidiary, Rainbow Holdings’ Voom service. In addition, Cablevision says they will eventually have the capacity to deliver as many as 500 HD channels, maybe even by the end of the year.

Cablevision has the ability to do this because they have probably been the most aggressive among MSOs to implement a switched digital video (SDV) architecture. SDV frees up bandwidth, and only delivers the channels being requested at any given time, as opposed to broadcasting all channels all the time. SDV is no stranger to IPTV operators – it’s the foundation of IPTV and allows telecom operators to deliver digital video services utilizing DSL over copper telephone lines. Cablevision is also quite aggressive with HD. It offers it at no additional charge, unlike most pay TV operators. As a result, they have a significant penetration. “The company has deployed more than 1 million high-definition set-top boxes to customers, and had 734,000 HD customers as of March 31 - an 85 percent increase in HD customers over the previous year.”
Or put another way, as may have been heard in some Cablevision board rooms - "take that DirecTV and Verizon FiOS!"