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How cable companies have quietly dominated public Wi-Fi

Paul Kapustka | Oct. 14, 2013
Big U.S. cable providers are the runaway leaders in providing public Wi-Fi, already eclipsing traditional providers such as big cellular carriers and coffee shop chains.

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 of 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.

 

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