How Cable Companies have Quietly Dominated Public Wi-Fi

Next time you pack your beach bag, make sure you pack your laptop and tablet along with your sunblock and trashy novel. Cable Wi-Fi service might soon be available at a seashore near you.

Wi-Fi

Next time you pack your beach bag, make sure you pack your laptop and tablet along with your sunblock and trashy novel. Cable Wi-Fi service might soon be available at a seashore near you.

Surfing the Web while watching the waves? Sounds funny, but it's already possible in many places along the Jersey Shore, and at Santa Monica Beach and Manhattan Beach in Southern California.

Even more surprising than the availability of Wi-Fi at the beach is the provider: More likely than not, it's a cable company, pursuing an aggressive policy among U.S. cable providers of bringing Wi-Fi services to just about every place their coax cables run. With more than 200,000 Wi-Fi hotspots launched in the past few years, big U.S. cable providers are the runaway leaders in providing public Wi-Fi, already eclipsing traditional providers such as big cellular carriers andA coffee shop chains.

Though the explosion in cable Wi-Fi hotspots is unlikely to challenge the cellular networks' overall mobile supremacy anytime soon, the growing availability of fast, sometimes free Internet access will likely have some positive benefits for many consumers. In particular, it may enable them to save money by jumping off the cellular network and onto free Wi-Fi more often, resulting in lower data bills. Or they could skip buying a data plan for devices like tablets altogether, and instead rely solely on Wi-Fi.

The locations of cable Wi-Fi hotspots have been something of a secret, but when people discovered them, they happily start using them--a reaction that may push the cable providers deeper into the wireless waters than they originally planned to go.

"Our Wi-Fi usage along the Jersey Shore is off the charts," says Tom Nagel, senior vice president of business development for Comcast Cable, who admits the company hasn't spent much time or money marketing the service. But Nagel says that once customers find the Wi-Fi signal, they tend to get hooked.A "When they find it, the usage goes up like wildfire," Nagel says.

Though cable companies have long been among the leaders in bringing TV and Internet service to American homes, wireless hasn't been a major part of the cable playbook until recently. But as people spend more time using tablets and smartphones, cable companies are turning to Wi-Fi to help keep them connected to the content they get from their existing cable plans.

"What we want is to enable our customers to take any of their services from their in-home broadband experience with them," says Rob Cerbone, vice president of mobile products for Time-Warner Cable.

From a market standpoint, what's most interesting is the way the biggest cable companies--which don't compete against each other, owing to their regional distribution--have banded together to make their Wi-Fi deployments even more appealing to customers who might otherwise turn to cellular for mobile data needs. In 2012 Time-Warner Cable, Comcast's Xfinity, Bright House Networks, Cox Communications, and Optimum launched the Cable WiFi effort, whichA allows customers of any participating cable provider to freely access the Wi-Fi hotspots of all the other providers.

Though nobody has an exact count of how many hotspots are available from all the cable deployments combined, the cable providers claim a number somewhere between 200,000 (according to the Cable WiFi website) and 300,000 (according to Comcast). For the most part, the hotspots are clustered around the big cities of the Eastern seaboard, and in the Los Angeles and San Francisco metro markets in California. Other concentrations occur around such cities as Austin, Chicago, Indianapolis, Kansas City, and Tampa--St. Petersburg. The total number of "Cable WiFi" access points far eclipses the 30,000 hotspots available from AT&T, the next-biggest competing service provider.

The cable companies' existing infrastructure of coaxial cables strung between power poles eased deployment of the new Wi-Fi hotspots. By splicing a breadbox-size Wi-Fi access point onto the overhead wire, cable companies took advantage ofA already-available Internet access, power, and real estate, resulting in fast and inexpensive Wi-Fi rollouts. Also, the Wi-Fi wireless spectrum's unregulated nature meant that the companies didn't need to pass government regulatory muster to launch the services, as the cell companies do when they want to erect cell towers.

Though the cable companies had dabbled in wireless strategies earlier--Comcast had invested in wireless provider Clearwire, and even offered its own branded wireless hotspot devices--none of those strategies were a good overall fit. "We often asked if wireless was friend or foe," Comcast's Nagel says. But several years ago, when the biggest cellular providers--AT&T Mobility and Verizon Wireless--began eliminating the unlimited or "all you can eat" data plans, many consumers started taking a harder look at how and where they used wireless data.

The search for an alternative helped create an opening for new players like cable to fill the gap. With the free Wi-Fi hotspots, which customers use their cable-contract information to sign in to, cable companies give their customers a way to access rich content on mobile devices, without having to pay extra for cellular data.

"There's a backlash [from consumers] against paying for data plans for so many devices, like a phone, a tablet, and home services," says Maribel Lopez, primary analyst at Lopez Research. "It gives cable companies the opportunity to say, 'Hey, just deal with me and I can give you what you need.'"

After users log in the first time, they are automatically connected for a full year, which removes a big part of the user pain involved in using Wi-Fi--namely, having to remember and type out the user name and password.

Many cable players are moving rapidly to add services such as live video to their online offerings, as a way to help keep customers happy about their overall cable plan.

The Wi-Fi offering relates directly to the cable companies' TV Everywhere initiative, which aims to let cable customers watch cable content on many different screens--mainly mobile ones. If cable companies can provide Web services (like Comcast's Xfinity) that send cable content over broadband, and then send it further to mobile devices via Wi-Fi, they may gain a competitive advantage over streaming video services like those from Netflix and Amazon.

"The model [for wireless] that we believe in is to add value to an existing Xfinity customer," Comcast's Nagel says.

Though they may have the greatest number of hotspots available, cable companies are far from the only providers betting big on Wi-Fi. Even as it continues to build out its cellular empire, AT&T plans to add more Wi-Fi hotspots. Google is getting into the Wi-Fi game too, having recently signed a deal to take over the operation of the well-known free Wi-Fi service offered at Starbucks Coffee stores. And privately owned hotspots may someday outnumber those from the big providers, since anyone with an Internet connection can become a Wi-Fi provider simply by adding an access point.

Even though AT&T, like cable, doesn't trumpet its Wi-Fi services too loudly, customers are finding the hotspots. AT&T reports that it saw 3.4 million Wi-Fi connections on its networks in the first quarter of 2008. By the fourth quarter of 2012, that total had climbed to 705.5 million Wi-Fi connections.

It's likely that the cable companies will soon start talking more about their Wi-Fi presence. Comcast's Nagel says that the company is moving past its test phases of deployment, and will begin to integrate its Wi-Fi offerings into its overall Xfinity marketing message over the next six months.

The cable guys intend to keep adding Wi-Fi options over the next year or two. "We're pretty bullish [on Wi-Fi]," Nagel says.

Though she doesn't think cable Wi-Fi will ever replace cellular, analyst Lopez sees the widening spread of cable wireless as a viable mobile-data option for many consumers: "I don't think people will downgrade [current cellular plans], but I think the cable Wi-Fi could help prevent the need to upgrade. For example, you could use Xfinity Wi-Fi around the neighborhood instead of paying $15 a month for the privilege of reading your online paper at the cafA(c)."

If an arms race between the cable and telephone companies heats up over Wi-Fi, the service may become widely and consistently available over the country's densely populated areas.

This story, "How Cable Companies have Quietly Dominated Public Wi-Fi" was originally published by IDG News Service .

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