With Rob Cerbone, Time Warner Cable's vice president of wireless products
Rob Cerbone has been with Time Warner Cable (NYSE: TWC) almost nine years and now runs all of TWC's wireless activities on the corporate development team, overseeing Wi-Fi, the company's relationship with Verizon Wireless (NYSE: VZ) and certain mobile apps, such as TWC's WiFi Finder. TWC is the subject of a $45 billion acquisition bid from Comcast (NASDAQ: CMCSA) in a deal that could be consummated by year's end if approved by regulators. Both MSOs have become leaders in Wi-Fi hotspot deployments and are members of the CableWiFi Alliance. FierceWirelessTech Editor Tammy Parker recently spoke with Cerbone regarding TWC's 2014 wireless roadmap. The following is an edited and condensed version of that conversation.
FierceWirelessTech: At the end of the first quarter of this year, Time Warner Cable operated close to 33,000 hotspots, having deployed more than 3,000 in the quarter. How many public access points does TWC expect to have by year's end?
Cerbone: That's not something we typically share publicly. What I can tell you is that we are continuing to deploy throughout the areas where we have Wi-Fi today, and what you'll see is that we will be more aggressive in deploying access points in what we call our Maxx markets, which is the markets where Time Warner Cable is doing speed upgrades on the residential broadband service. So in New York and L.A., you're going to see us put out a lot more access points this year and probably to a lesser extent in Austin. And we'll continue building out in the other Wi-Fi markets we've got, which are Kansas City, Charlotte, Myrtle Beach and Hawaii.
FierceWirelessTech: Do these hotspots go into city centers primarily?
Cerbone: The majority of the focus is in areas where we believe that our customers use mobile data. So we've got tools that we use such as mobile data heat maps to help inform our design of the Wi-Fi networks. We like to put networks where people are playing, where they're outside shopping and dining. There are some larger venues that we've lit up, such as TWC Arena with the NBA's Charlotte Bobcats. We're also putting out Time Warner Cable hotspots inside small- to medium-size businesses that are buying our commercial Internet product. That's one area where we will probably start pushing a little more aggressively throughout the course of this year.
FierceWirelessTech: Hotspot 2.0 has been slow to take off, but the new TWCWiFi-Passpoint service includes Hotspot 2.0 technology on most TWC public access points. Why is TWC being so aggressive with Hotspot 2.0?
Cerbone: (Laughing) I don't know that it's us being aggressive vs. everyone else being so slow.
If you look at what's going on in the infrastructure and on the device side, you've got a lot of availability. There's a big chunk of access points that have been certified by most of the vendors to support the capability. On the handset side, most of the iOS devices from the last few years support it as well as a pretty good chunk of the new handsets coming out from Samsung and other leading handset manufacturers. So Hotspot 2.0 is out there. I think it just hasn't been adopted aggressively by the mobile carriers to date because to some extent it takes revenue off of their network.
For us, Wi-Fi is our network. While we have a partnership with Verizon Wireless for our customers that want a mobile offering, our wireless network today is our Wi-Fi network.
So what Hotspot 2.0 gives us is a couple of things. One, the nearest-term thing were getting out of it is security. With the Passpoint network that we've deployed, we get a secure option for customers that have a concern around security. One of the top three reasons we've seen why people were not using our Wi-Fi network was because it wasn't secure. For customers who are a little more security conscious, we now have an option. The second piece, which is probably going to be coming a little bit later, is that we believe this is going to help us in terms of simplifying the user experience, not only for customers on our network but as we start to expand some of the roaming partnerships we're in, it will simplify a lot of that as well.
FierceWirelessTech: You have said that TWC doesn't intend to use Wi-Fi to challenge cellular operators, but it still seems like TWC might yet enter the wireless market by leveraging its existing fixed infrastructure in conjunction with Wi-Fi and partnering with a Wi-Fi-based MVNO, such as Scratch Wireless or Republic Wireless. How do you see the cable industry evolving from a wireless perspective?
Cerbone: Today we're deploying Wi-Fi and we're deploying it pretty aggressively, based on the business case that's entirely predicated on customer satisfaction or retention of our home broadband customers. We feel that business case plays out. We're seeing those customers use it. Those customers seem satisfied. We believe we're definitely seeing a benefit for the customers that are using Wi-Fi versus the ones that don't.
There are a lot of things we could do in the future, but there are still some technical blockers that need to be resolved. And for today, we're content doing what we've been doing.
To the extent that one of our customers uses one of those services, like Scratch or Republic Wireless, we think that our customers will get a tremendous amount of value out of that because they can offload onto our Wi-Fi network and that really goes back to reinforcing the value of our broadband service. And that makes us happy.
As for us launching a Wi-Fi MVNO, that question has been asked over and over, and we have no plans to do that in the near term. We've kind of been down the wireless path before. And I think what we've seen is to date there has not been a tremendous amount of demand for what some people would call the quadruple play, where you bundle a mobile service with the fixed video, voice and high-speed data services in the home. For customers that are interested in that, we can offer them service from Verizon Wireless. And for all of our broadband customers we would certainly love for them to use our Wi-Fi network.
FierceWirelessTech: TWC is part of the WiFiForward coalition, which is calling for policymakers to open up more unlicensed spectrum for Wi-Fi and other uses. Why is this an important cause for TWC, and how does unlicensed spectrum fit into TWC's future business plans?
Cerbone: We are absolutely big supporters of unlicensed spectrum, and we use it in a number of different products today. We use it in our wireless home networking products, we use it in business-class wireless LAN products, and we're obviously using it outside for Time Warner Cable hotspots. We find a lot of value in unlicensed spectrum for Wi-Fi in general, and we would always like to see more of that spectrum made available.
For example, the 5 GHz ruling that came down recently from the FCC added an additional 100 MHz allocated to Wi-Fi, and it's also in, or adjacent to, some of the existing frequency bands that are already supported by devices today. We view that as a huge win because you've got hundreds of millions of devices out there that are not going to require a tremendous amount of effort to upgrade to add this additional spectrum inside those devices. Ultimately, that will enable us to offer things like gigabit Wi-Fi.
We do realize there is a place for licensed spectrum as well. We advocate a mix of both of those, though the push for us is more on the unlicensed side.