A day after Comcast and Time Warner Cable announced investments in a WiMax joint venture spearheaded by Sprint and Clearwire, Cablevision said it would build its own wireless broadband network, using Wi-Fi.
While Cablevision's announcement may sound outdated given the failures of some once-hot municipal Wi-Fi networks, its model makes sense, said Phil Solis, an analyst with ABI Research.
Cablevision, which plans to build the network covering its footprint within the next two years, will allow subscribers of its Optimum high-speed-access service to use the wireless network as part of their regular subscriptions. The company, which offers cable service in parts of New York, Connecticut and New Jersey, is already offering the Wi-Fi services in some areas, said Tom Rutledge, chief operating officer for Cablevision, speaking on Thursday during a conference call to discuss financial earnings.
"The primary purpose is a free, value-added service to new or existing customers," Solis said. That's what sets this network apart from some of the other municipal networks that have failed, he said. "A lot of these muni Wi-Fi networks that have been built have been stand-alone entities that have relied on subscribers to pay fees or on advertising revenue," he said. They also often designed their business models around city contracts that never came.
The network should be relatively easy for Cablevision to build since the company already has a network of high-speed lines to attach Wi-Fi access points to. In essence, Cablevision is "letting people, via Wi-Fi, tap into their broadband network," Solis said.
In addition, Cablevision customers may already have devices like iPhones, handheld gaming devices and laptops that have Wi-Fi capabilities. Cablevision said users will receive download rates of around 1.5M bps (bits per second).
Still, Cablevision's network will be complete after Clearwire will have built much of its network. Clearwire will use WiMax, a newer, longer-range wireless technology, in licensed spectrum to deliver the service.
WiMax and Wi-Fi each have advantages and disadvantages in comparison, but Wi-Fi makes sense for Cablevision, Solis said. The operator has a relatively manageable area to work with, which is important because the range of Wi-Fi is shorter than WiMax, so building a Wi-Fi network requires more equipment.
EarthLink's municipal Wi-Fi struggles perhaps best reflect the overall trouble the sector has experienced over the past couple of years. The company bet big on citywide Wi-Fi projects, but building the networks turned out to be expensive, and local politics slowed progress. While EarthLink still operates Wi-Fi networks in a handful of cities, last year it called off plans to build additional networks and said it was open to selling its municipal Wi-Fi business unit.