Possibly laying the groundwork for future Wi-Fi First wireless services, a cable company announced the deployment of Wi-Fi hotspot networks last week.
Time Warner Cable (TWC) launched a national Wi-Fi network, using HotSpot 2.0 Passpoint-enabled technology on most of the access points, which allows seamless roaming between Wi-Fi networks similar to the way cellular phone users roam cellular networks. Edgar Figueroa, CEO of Wi-Fi Alliance, praised the deployment, saying that Time Warner Cable has taken a leadership stance in deploying advanced Wi-Fi technology.
The product is being marketed as a value-add to the existing Internet service for customers, according to Judy Barbao, spokesperson, Time Warner Cable. “Anyone who signs up for Internet service, standard or above, gets the added advantage of free Wi-Fi service through the Time Warner Cable network,” Barbao said. “It will be a part of our bundle of services.”
Startup companies, such as Republic Wireless and Scratch Wireless, are offering access to Wi-Fi access nodes in what are being referred to as Wi-Fi First networks.
“There are currently no plans for further marketing of the Wi-Fi HotSpot 2.0 service, but down the road we could look at arrangements that would monetize it,” Barbao said.
The Wi-Fi HotSpot network will use the enterprise-grade security WPA2 and is available for most Wi-Fi-enabled laptops, tablets and smartphones. After connecting to the network the first time, customers will then seamlessly connect to the new preferred secure network whenever in broadcast range.
“There is a small percentage of customers that are leery of accessing public Wi-Fi,” Barbao said. “We hope that by providing this secure network it will attract those customers, too.”
The new network option is available on nearly all of TWC’s 33,000 Wi-Fi hotspots throughout Southern California; New York City; Austin, Texas; Charlotte, N.C.; Kansas City; Myrtle Beach, Fla.; and Hawaii. A downloadable app helps the phone seek out nearby TWC access points.
With Comcast planning to deploy HotSpot 2.0 across its one million access points, and a possible merger in the offing, TWC appears to be heading for a Wi-Fi First wireless offering. Either way, cable companies using Wi-Fi First networks are going to be a force to reckon with in the wireless world.
WiFi networks being deployed by cable companies increased dramatically in 2013, setting up MSOs to be leading low-cost providers of nomadic broadband data service. Cable customers now can access free WiFi in in hotspots that are strategically located in high-traffic areas such as restaurants, malls, sports arenas, parks in a growing number of cities through roaming agreements that were signed throughout the year.
Additionally, cable giants have found an additional revenue stream in unlicensed spectrum, offering WiFi to non-customers for a fee.
“Cable is a growing part of public WiFi development. These hotspots … are quickly becoming an integral part of the U.S. communications network,” wrote John Solit, spokesman for the National Cable and Telecommunications Association.
In June, Cablevision, Comcast, Time Warner Cable, Cox Communications and Bright House Networks announced their combined WiFi network exceeded more than 150,000 hotspots in major cities across the nation, which was triple the size when “CableWiFi” was originally deployed June 2012.
In July, Time Warner Cable expanded its WiFi infrastructure in New York City, with more than 1,700 active WiFi hotspots in Brooklyn, Queens and Staten Island, and more than 1,000 new WiFi hotspots in Manhattan. Nearly 10,000 more hotspots are projected to be added across New York City by the end of 2013.
In November, Cox Communications announced that its customers will be able to access nearly 200,000 WiFi hot with the integration with Time Warner Cable’s hotspots.
“Business Services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fiber network to better serve customers, particularly those in key markets in the Carolinas”
DukeNet, based in Charlotte, N.C., is a regional fiber optic network company serving customers in North Carolina and South Carolina, as well as five other states in the Southeast. With a fiber optic network of over 8,700 miles, DukeNet provides data and high-capacity bandwidth services to wireless carrier, data center, government, and enterprise customers. Duke Energy owns 50 percent of DukeNet. The Alinda investment funds own the remaining 50 percent.
“Business Services is a key growth area for Time Warner Cable and this acquisition will greatly enhance our already growing fiber network to better serve customers, particularly those in key markets in the Carolinas,” said Phil Meeks, Executive Vice President and COO of Business Services for Time Warner Cable. “This acquisition will help us expand our fiber footprint at a price that is consistent with our disciplined approach to M&A, accounting for expected synergies and tax benefits.”
“This is a positive transaction for Duke Energy,” said Marc Manly, president of Duke Energy’s Commercial Business group. “The sale completes Duke Energy’s transition out of DukeNet, which although a growing operation, is a non-core business to our company.”
“We are pleased to have been co-owner of DukeNet and partner with Duke Energy through a very exciting time in the development of telecommunications infrastructure generally, and DukeNet’s business specifically,” said Alinda’s managing partner, Chris Beale. “We believe DukeNet is well-positioned to continue its record of strong growth.”
The transaction, which is expected to close in the first quarter of 2014, is subject to various customary closing conditions, including receipt of regulatory approvals. RBC Capital Markets, LLC advised Duke Energy and Alinda on the sale of DukeNet, and Moore & Van Allen PLLC provided legal counsel. Edwards Wildman Palmer LLP provided legal counsel to Time Warner Cable.
About Time Warner Cable
Time Warner Cable Inc. (NYSE:TWC) is among the largest providers of video, high-speed data and voice services in the United States, connecting more than 15 million customers to entertainment, information and each other. Time Warner Cable Business Class offers data, video and voice services to businesses of all sizes, cell tower backhaul services to wireless carriers and enterprise-class, cloud-enabled hosting, managed applications and services. Time Warner Cable Media, the advertising arm of Time Warner Cable, offers national, regional and local companies innovative advertising solutions. More information about the services of Time Warner Cable is available at www.twc.com, www.twcbc.com and www.twcmedia.com.
About Duke Energy
Duke Energy is the largest electric power holding company in the United States with more than $110 billion in total assets. Its regulated utility operations serve approximately 7.2 million electric customers located in six states in the Southeast and Midwest. Its commercial power and international business segments own and operate diverse power generation assets in North America and Latin America, including a growing portfolio of renewable energy assets in the United States. Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK. More information about the company is available at: www.duke-energy.com.
About Alinda Capital Partners
Alinda Capital Partners is one of the world’s largest infrastructure investment firms with approximately $7.8 billion in equity commitments to infrastructure investments. Alinda has invested in infrastructure businesses that operate in 31 states in the United States as well as in Canada, the United Kingdom, Germany, the Netherlands, Austria, Belgium and Luxembourg. These businesses serve 100 million customers annually in more than 400 cities globally and employ more than 15,000 people. Alinda’s investors are predominantly pension funds for public sector and private sector workers and include some of the largest institutional investors in the world. Alinda and its subsidiaries have two offices in the United States — in Greenwich, Conn., and Houston — and two offices in Europe — London and Düsseldorf, Germany. More information about Alinda is available at: www.alinda.com.
Time Warner Cable Caution Concerning Forward-Looking Statements
This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological, strategic and/or regulatory factors, and other factors affecting the operations of Time Warner Cable Inc. More detailed information about these factors may be found in filings by Time Warner Cable Inc. with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Time Warner Cable is under no obligation to, and expressly disclaims any such obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, or otherwise.
Duke Energy Cautionary Statements Regarding Forward-Looking Information
This document includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are based on management’s beliefs and assumptions.
These forward-looking statements are identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “should,” “could,” “may,” “plan,” “project,” “predict,” “will,” “potential,” “forecast,” “target,” “guidance,” “outlook” and similar expressions. Forward-looking statements involve risks and uncertainties that may cause actual results to be materially different from the results predicted. Factors that could cause actual results to differ materially from those indicated in any forward-looking statement include but are not limited to: state, federal and foreign legislative and regulatory initiatives, the possibility that the impact of compliance with material conditions imposed by regulators related to the Progress Energy merger could exceed our expectations, continued industry consolidation, the timing and extent of changes in commodity price, interest rates and foreign currency exchange rates and the ability to recover such costs through the regulatory process, where appropriate, the results of financing efforts and the ability to obtain financing on favorable terms which can be affected by various factors, including credit ratings and general economic conditions, and the ability to successfully complete future merger, acquisition or divestiture plans.
Additional risks and uncertainties are identified and discussed in Duke Energy’s and its subsidiaries’ reports filed with the SEC and available at the SEC’s website at www.sec.gov. In light of these risks, uncertainties and assumptions, the events described in the forward-looking statements might not occur or might occur to a different extent or at a different time than Duke Energy has described. Duke Energy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Cable companies, which backed out of the cell phone world, are increasing their presence in Wi-Fi. One example, Time Warner Cable is expanding its Wi-Fi infrastructure in New York City, with more than 1,700 active Wi-Fi hotspots in Brooklyn, Queens and Staten Island, and adding more than 1,000 new Wi-Fi hotspots in Manhattan in mid-July. By the end of this year, nearly 10,000 more hotspots will be added across New York City.
Time Warner provides Wi-Fi at no additional cost to its customers and on a pay as you go basis to non-subscribers at more than 75,000 Wi-Fi hotspots across the tri-state area of New York, New Jersey and Connecticut. Users connect to a TWC Wi-Fi hotspot by using an app available in Google Play and the Apple App Store.
Cox Business, an arm of Cox Cable, is making Wi-Fi available at hospitality venues across its national footprint later this summer.
“A seamless wireless Internet experience is one of the most critical elements of a positive hotel stay,” said Jeff Adelmann, vice president of product development and management for Cox Business.
Cox Business engineers and technicians design and install a wireless network with Cisco Service Provider Wi-Fi Solution to provide Internet access in all parts of the property. The Cox Hospitality Wi-Fi service includes continuous monitoring of the Cisco solution.
Cox Business has been offering business-grade Wi-Fi in hotels in a portion of its footprint for several years, including some of the largest hotels in Las Vegas.
Cable Companies Offer Wi-Fi Roaming
Major cable companies have already banded together to provide Wi-Fi roaming for their customers. Time Warner, Comcast, Bright House Networks, and Optimum cable all allow their cable modem subscribers to roam on each other’s cable Wi-Fi networks just by selecting the “CableWiFi” service on their smartphone, tablet or computer.
“These inter-company network-sharing arrangement s are an early step by the big cable operators to provide a shadow wireless national network for VoIP and Internet connectivity, both complementing and competing with traditional cellular service providers” said Jonathan Kramer, a telecommunications attorney and wireless engineer in Los Angeles.
Comcast’s Wi-Fi strategy currently includes two approaches. The first is the inclusion of tens of thousands of Xfinity Wi-Fi access points in the CableWiFi Alliance, which enables Xfinity Internet customers access to more than 150,000 indoor and outdoor Wi-Fi hotspots in more than a dozen major cities across the country through the “CableWiFi” SSID. The second is the launch of a home-based, neighborhood hotspot initiative.
Comcast’s home-based wireless gateway broadcasts two Wi-Fi signals. By default, one signal is securely configured for the private use of the home subscriber. The second is a neighborhood “xfinitywifi” network signal that can be shared. This creates an extension of the Xfinity Wi-Fi network and will allow visiting Xfinity Internet subscribers to sign in and connect using their own usernames and passwords. Currently 100,000 of these gateways are in place.
The National Cable and Telecommunications Association wrote in its July 4th blog that the number of cable Wi-Fi hotspots is now 150,000 nationwide.
“Cable is a growing part of public Wi-Fi development. These hotspots … are quickly becoming an integral part of the U.S. communications network,” wrote John Solit, NCTA spokesman. “To put it in perspective, there are 10 times more cable Wi-Fi hotspots in America than there are Starbucks hotspots. Cable Wi-Fi hotspots are used by consumers not only to provide access to broadband when they’re on the go, but also to help manage their wireless accounts by offloading usage onto Wi-Fi when possible.”
Netherland Cable Cos. Launch, Share Wi-Fi Networks
Cable companies worldwide are expanding into Wi-Fi service. One example is a Netherlands-based cable company, Ziggo, which has begun a national rollout with 65,000 Wi-Fi hotspots in The Hague, with plans to expand access to almost 1 million Wi-Fi hotspots by the end of August.
“For many years, Ziggo clients have been using our products in the comfort of their own homes, where they have been able to fully enjoy our service offerings. We now want to provide this as a mobile experience,” said Pieter Vervoort, vice president, Consumer Products & Innovation at Ziggo. “We are currently working on several new services that will be geared to the ‘Ziggo WifiSpots’ network.”
Ziggo also plans to combine Wi-Fi networks with cable company UPC, according to Dutch News, with testing beginning this month.
McDonald’s has signed an agreement with KGI to market its restaurants as sites for cell towers. The agreement covers 11,500 locations nationwide that are owned by the iconic fast food franchise.
“McDonald’s places its restaurants in strategic areas where people live, work and shop,” Mike Kampen, principal, KGI Wireless, told AGL Bulletin. “Those are pretty good criteria for siting cell towers, as well.”
As a result of the agreement, KGI Wireless has established KGI Towers, which will serve as McDonald’s only source for construction and development. McDonald’s had previously promoted itself to carriers as a cell site location, but without too much success.
“The difference here is we are marketing to all the carriers, not just a few. We will build the towers with enough capacity for three or four carriers, which means more revenue for McDonald’s,” Kampen said. “We are simplifying the model. We are probably easier to do business with because they are in the burger business and we are in the cellular business. We know who to call.”
KGI had previously focused on marketing existing towers for companies such as Charter Communications, Verizon Wireless, Mediacom and Time Warner Cable. Although KGI does manage wireless sites for Kum & Go convenience stores.
“This is a divergence from our norm,” Kampen said. “This is the first time KGI has gotten into the ownership side. Previously, we were on the real estate services side. This is an attempt to diversify our organization and provide another revenue opportunity for growth.
KGI currently has agreements to build at six McDonald’s sites. It will build two to three sites in 2011.
“We think it will grow in time as we get deals done with major carriers. We will develop a healthy pipeline and hopefully do a lot of deals over time,” Kampen said. “We recognize there is a need out there. When we got into this business 10 years ago, the search rings were 4 to 5 miles in radius, now a search ring might have a radius of a quarter mile down to a few city blocks. As carriers try to strengthen their networks to provide throughput to handle 4G, their real estate options are limited. This is another viable option.”