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Cablevision Goes Wide With Wi-Fi

5/09/2008 8:00 PM Eastern

One day after a trio of its cable peers unveiled an ambitious $12 billion wireless venture, Cablevision Systems quietly unveiled a plan to build out its own wireless network by itself.

The Bethpage, N.Y.-based operator said it would spend more than $300 million to build out a high-speed Wi-Fi network throughout its metropolitan New York City service area in the next two years.

On a conference call with analysts to discuss first-quarter results on May 8, Cablevision chief operating officer Tim Rutledge said the cable operator has already begun building out the network, whose service will be available free of charge to its Optimum Online customers.

Non-subscribers would be charged for the service, Rutledge said, but that amount has not been determined yet.

Rutledge said the network will cost about $70 per home passed to build, or about $330 million.

Cablevision has offered a Wi-Fi service in about 15 communities in the Bronx, Long Island and Westchester County in New York, New Jersey and Connecticut for several years. On the conference call, Rutledge said that with broadband penetration above 50%, Cablevision now had the critical mass to build out the Wi-Fi network. Cablevision currently has about 2.3 million Optimum Online customers in its New York metropolitan area service territory.

In a municipal Wi-Fi mesh network, outdoor access points use a routing algorithm to communicate with each other, in peer-to-peer fashion, to carry traffic back to an operator’s wired network. Multiple radios are mounted on each tower or pole, with antennas in a circular array to provide coverage in all directions.

Providers of municipal Wi-Fi mesh-networking equipment include Cisco System, Motorola and BelAir Networks.

According to Cisco, a Wi-Fi mesh network could allow a cable operator to offer subscribers ubiquitous connectivity in a metro area for any service. For example, someone watching TV could choose to transfer the video signal to a cellular phone and walk outside if Cisco’s Cable ServiceMesh is deployed in the subscriber’s neighborhood.

Some operators have offered Wi-Fi access on a limited basis, most notably Bresnan Communications, which offers a Wi-Fi service in Billings, Mont.

“We found that half of our customers today have Wi-Fi routers in their homes,” Rutledge said. He added that with the proliferation of Wi-Fi enabled devices and industry projections that demand will continue to be strong, the time was ripe for Cablevision to build its own network.

Todd Spangler contributed to this report.

September