Media Briefing on Broadband & Mobility

September 14, 2008

What Cablevison’s deal means to muni broadband

Filed under: Municipal broadband — Craig Settles @ 10:43 pm

Recently an editor asked me if the introduction of free wireless service by Cablevision is an alternative to municipal wireless. Technically, it is an alternative assuming a city has no relationship with Cablevision in this endeavor. The implied question here is, does Cablevision negate the business case for muni broadband?

My take on this is two-fold.

First, I think the cable companies are in a great position to offer to the general public WiFi as a free or low-cost extension to their indoor service. The cost per sale to close “new” customers is insanely low because they can easily push their current customers into the service, and sell it as part of a cable/wireless package to totally new customers.

This low cost of acquisition, plus the fact a cable company already has in place much of the infrastructure needed to profitably manage customers, addresses one fatal flaw in offering muni wireless to the general public – it’s hard to offer cheap service and make a profit. We see how well EarthLink, MetroFi and a host of cities did in this endeavor.

However, my second point is, municipalities that are interested in using wireless services for local government employees, emergency personnel from all levels of government and underserved communities should play an active role in that cable company’s move.

Either the municipality becomes a lead customer of the wireless service, and therefore have influence over pricing and the use of some aspect of the network for the public good. Or the municipality should partner with the cable company in a formalized arrangement so local government can influence the service.

Remember, one of the main reasons the muni wireless effort took wing so quickly was that cable and telco companies weren’t doing good by consumers because incumbents take care of shareholders first. Low income residents, residents in sparsely populated areas, any communities not able to contribute to the bottom line are SOL.

Left to their own, Cablevision will roll out wireless as it best suits their profit-generating needs, which could create the same shortfalls that sparked muni wireless efforts. They already have limited free access to their existing customers only. What happens to those who can’t get or can’t afford Cablevision? What about all the benefits local governments could derive for their workers?

The bottom line? Cablevision, and cable companies in general, as a provider of free wireless is an opportunity to become an alternative to true muni wireless. But it will take municipal involvement to transform potential to reality.

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