"These initiatives and others will position cable operators to play an important role in 5G backhaul and potentially Virtual RAN midhaul. Over the longer term, they may open a path to 5G fronthaul as well." -Liliane Offredo-Zreik and Chris Nicoll, principal analysts, ACG Research

Mobile network operators need a cost-effective solution for their 5G network densification that will enable them to deliver the full benefit of speed and latency improvements inherent to 5G. The much-promoted speed and latency benefits of 5G primarily come with the use of mmWave spectrum in the ranges above 20GHz. ACG predicts that to deliver on the full potential of this valuable mmWave spectrum, 5G networks will need to be up to 10x denser than 4G networks. In this spectral range, transmission range is limited to typically less than 500m, thus using small cells or mini-macro cells is an essential ingredient in the successful densification of 5G. Adding the vast number of new cell sites to achieve the necessary densification is a challenge to telecom operators and an opportunity to cable operators.

Wireless cells have traditionally been backhauled over fiber. However, given the significantly larger numbers of cells needed in 5G and the need to locate them very closely to subscribers, using fiber to backhaul these cells is very expensive and operationally more complex. Pulling fiber and power very deep into the access network requires permits and construction, delaying the deployment for several months to a year.

This is where cable operators come in. According to NCTA, the cable plant passes 93% of US homes, and cable operators have largely upgraded their infrastructures to DOCSIS 3.1, which enables capacity of up to 10 Gb/s downstream and 1 Gb/s upstream. Furthermore, with the continuing node splits and the migration to a distributed access architecture, modern cable systems will have the capacity and bandwidth needed for 5G backhaul. The cable plant also has sufficient power in the last mile; this enables DOCSIS to meet the need of backhaul in terms of bandwidth and power.

Does the cable infrastructure meet the bandwidth and latency requirements for 5G backhaul? What about fronthaul and midhaul for Virtual RAN? The answer is a qualified yes. The latency requirements for 5G backhaul are far less stringent than those of midhaul and fronthaul, where latency requirements can be 25us–75us (microseconds).

For midhaul and fronthaul the answer is more complicated because each RAN virtualization option has different latency and bandwidth requirements (table), and wireless operators have not settled on one split option. Moreover, although LTE utilizes individual wireless spectrum channels of up to 20 MHz each, 5G expands channel widths to 100 MHz and greater, which increases the amount of bandwidth needed to serve a cell site by up to 5x.

Typically, fronthaul and midhaul are best served by fiber or optical ethernet connections. However, cable operators are working on a number of initiatives to address both latency and bandwidth constraints in an effort to become a viable alternative for midhaul and fronthaul:

Low Latency xHaul (LLX) was introduced by CableLabs in June 2019 to address the latency requirements of xHaul; it has a pipelining scheme to hide the DOCSIS latency behind the 5G latency.

Synchronization Techniques for DOCSIS Technology Specification, introduced in April 2020, addresses the asymmetrical shortcoming of DOCSIS because the mobile network is symmetric in nature and requires the sharing of a common clock.

DOCSIS 4.0 enables operators to significantly increase upstream bandwidth, either using Extended Spectrum or Full Duplex DOCSIS. The additional spectrum, going to 1.8 GHz and even 3.0 GHz, will substantially increase the bandwidth availability in the last mile.

These initiatives and others will position cable operators to play an important role in 5G backhaul and potentially Virtual RAN midhaul. Over the longer term, they may open a path to 5G fronthaul as well. Efforts to utilize mmWave spectrum provide a much-needed capacity layer to 5G networks but require a cell density to achieve consistent coverage. Small cells are ideal for 5G densification; however, the backhaul and power requirements to get them connected has posed a barrier for years.

Cable operators are in an advantageous position to serve a positive and profitable supporting role in 5G network deployment and densification, particularly in backhaul, and have a potentially successful pathway toward enabling midhaul and even fronthaul in the future. 

Pity the cable operators. Their business is under relentless assault from existing and new competitors. Their networks are increasingly strained by the insatiable demand for bandwidth. And unlike in times past when the playbook to improve their network was well-defined, today, their modernization options are numerous, complex, and involve significant trade-offs and dependencies. At the same time, the pace of change has accelerated significantly. For example, 1.2 GHz started in 2016 and only took three years for wide deployment. Some operators are now talking about 1.8GHz, undoubtedly driven by things like turbo EPON (up to 2.5 Gb/s downstream) and 5G wireless. In the near term, operators are grappling with how to achieve 10G, which is expected to deliver 10Gb/s capacity, lower latency and improved security.

Here are just some of the technologies cable operators have to consider:

• Distributed access architecture, which itself has primarily two flavors to consider: R-PHY and R-MACPHY
• Full Duplex DOCSIS (FDX) for operators that are able to commit to an N+0 architecture
• Extended Spectrum DOCSIS (ESD) for operators that are more likely to adopt an N+small architecture
• The virtualization the CCAP core.

Just when operators are working on wrapping their arms around 10G, the vendor community already has 25G in its sights. Although there are many alternatives to deliver 10G, 25G inevitably will require more spectrum, perhaps as much as 3GHz of it. Increasing spectrum is a major undertaking for operators. It requires changes to the amplifiers and taps in the outside plant, a very costly and operationally complex undertaking. In recent time, operators made changes to the outside plants every 10 or so years. Recent industry developments are forcing them to consider significantly shorter change cycles.

And that’s not all. Recently CableLabs announced that it started working on DOCSIS 4.0, which is supposed to include FDX, ESD, and low latency, as well as other capabilities that are yet to be defined.

Sorting their way into all these options is no simple matter. Operators need to do this while maintaining a complex network and while serving customers that are ever more demanding. 

A telecom executive nicely described the challenges operators face as they modernize their networks and operating environments: 

“When you’re in a business like ours, you have to execute across a couple hundred initiatives in parallel, into multiple markets, across multiple infrastructures, with all sorts of different people. And we make our overall numbers as the sum of a thousand small numbers. It’s not a straightforward path”, said Simon Moutter, outgoing managing director, Spark (nee Telekom New Zealand).

All things being considered, it is no wonder that operators are not moving at lightning speed to evolve their networks. Their roadmap will be carefully planned, thought through, and will be driven by the need to solve real problems they face today or are likely to face in the foreseeable future. It is up to vendors to meet them where they are, to help them as they define their roadmaps by creating end-to-end solutions that solve their specific needs, while providing the guidance on tradeoffs and alternatives that will help them plan their transformation journeys.

Traditional cable distribution stocks, once thought to be dead in the water as over-the-top players continued to erode their video customer base, came to life in the first half of 2019, as investors focused on broadband growth, driving the sector up by 40% in the period.

That’s a big turnaround from last year, when distribution stocks as a whole fell 5% during the period between Dec. 29, 2017 and June 19, 2018. The biggest factor in that reversal of fortune appears to be a combination of a change of attitude for investors, coupled with the continued strength of cable broadband service.

Altice USA, poised to launch its wireless service later this year, led the sector with a 45.6% rise in its stock price from $16.52 on Dec. 31 to $24.06 on June 19. Cable One, the Phoenix-based operator that changed its name to Sparklight in May to reflect its emphasis on broadband service, was a close second, rising 41.8% to $1,162.69 per share on June 19. The rest of the sector was up by double digits in the period, with Charter Communications up 39.6%, followed by Liberty Global (29.5%) and Comcast (26.7%).

Helping to fuel that growth was what appears to be a change of investor sentiment around the stocks. The first quarter was the worst ever in terms of cord-cutting — satellite TV companies took the biggest video customer hit, losing nearly 900,000 combined customers in the period, while cable companies lost a combined 366,000 video subscribers — but investors didn’t seem to worry. It’s all about connections.

Connectivity Is the Key

“Connectivity, that isn’t even close to dead,” FBN Securities analyst Robert Routh said in an interview. “Everybody needs it. They need WiFi, they need broadband, they need access to these OTT networks when they’re not on their cellphones. Because of that cable broadband growth has been what it’s been.”

Broadband growth across stocks in the cable distribution sector continued to be strong. Comcast added 375,000 high-speed internet customers in Q1, while Charter added 428,000, Altice USA added 36,900 and Cable One added 15,311. That momentum isn’t expected to shift anytime soon, according to Routh.

“Cable is still the best architecture for [broadband] and as a result demand for that product keeps going up,” Routh said. “Penetration is going up, churn is going down and there is no reason to think that will slow, ever.”

Investors are starting to realize that despite the trend toward OTT distribution, virtual MVPDs don’t work without a viable, reliable broadband connection. More often than not, that connection is through a cable company.

Large cable and telephone providers represent about 95% of the U.S. broadband market, according to Leichtman Research Group. In Q1, the top cable companies added 925,000 high-speed internet subscribers, a 109% increase over the prior year, and multiples above the 20,000 customers the major telcos gained in the period.

There are about 98.7 million broadband customers in the U.S., Leichtman estimated, with cable operators accounting for 65.3 million and telcos the remaining 33.4 million subscribers.

Routh said there might come a time when cable operators stop breaking out video, voice and data subscribers, instead disclosing connections only. Some operators are doing this to an extent — trying to push total customer relationships, rather than customers, for individual products. To some, the volatility of video only confuses investors.

“It causes the stocks to either stay within a narrow range or to whipsaw, where they go up one quarter when your subs show no [growth] or [some] growth in video, to a material down when you show a big loss in video,” Routh said of breaking out subscribers by product. “Because data is very consistent and telephony nobody cares about.”

Reporting overall connections could remove some of that confusion, he added.

“The reality is all that investors care about is how many homes you’re passing, how many are you connected to in some shape or form and what’s your average revenue per home,” Routh said. “They don’t care where the money is coming from.”

While distributor stocks were ablaze, the programming sector wasn’t quite as fiery, rising about 11.7% in the period as strong gains by large players were offset by sluggish performance at smaller content providers.

The Walt Disney Co., riding a huge wave of optimism after closing its $71.3 billion purchase of 21st Century Fox assets and mapping out details of its upcoming direct-to-consumer streaming offering, led the sector by rising 28.5% during the period to $140.92 per share on June 19.

Disney expects to launch its Disney+ streaming service in November at a $6.99 monthly price point, projecting at an Investor Day in April that between 60 million and 90 million customers globally would sign on to the service by 2024.

Disney’s decision to go full disclosure during that Investor Day — most analysts were at best expecting some vague subscriber data and no pricing information — helped lift the stock out of the doldrums.

“Bottom line: We got what we needed and we REALLY like what we heard,” Wolfe Research managing director Marci Ryvicker wrote in a note to clients about the April Investor Day.

Investors responded in kind. Disney stock hadn’t been able to consistently crack the $120-per-share threshold since the summer of 2015, when chairman and CEO Bob Iger revealed that its ESPN channel was experiencing some subscriber erosion, sending the sector into a four-year tailspin. Disney stock rose 11.5% on April 12 to $130.06 each, the day after the Investor Day, and has been up about 7% ever since.

Said Evercore ISI Group media analyst Vijay Jayant of the Disney Investor Day: “We came away encouraged by the sheer scale of the business model transformation that Disney has begun with the aim of becoming a leader in global internet TV. Clearly, the company has the brands, content and vision to make the strategy work — and we think the new ambitious long-term financial targets issued at the event, both on the revenue and cost sides of the equation, reflect the scope of the project now underway.”

Shares in Discovery Inc., which has been spending the better part of the year expanding its European sports lineup and landing deals with OTT providers, rose 23.3% in the first half. Viacom and CBS, fueled mainly by speculation that the two would finally recombine after more than a decade apart, saw their stocks rise by 18.6% and 13.8%, respectively.

Fox Corp., the entity left after 21st Century Fox sold most of its programming assets to Disney in March, has been pressured by what Routh said were investor concerns as to whether it would realize the cost synergies expected from the Disney deal, and whether management would implement a share-repurchase plan. Fox has said it expects between $300 million and $400 million in cost synergies and to generate about $2 billion in free cash flow annually after the Disney transaction.

“So what are you going to do with that cash?” Routh asked. “They haven’t done anything yet and people are questioning if they haven’t put a buyback in place and used it, why would I want to own it?”

The stock, as a result, is down about 6.8% since March 20, when Fox closed the Disney deal.

Routh and most other analysts expect Fox to rebound in the second half of the year and return to the high $30 or low $40 range by the end of the year.

Shaky Times for Smaller Nets

Smaller programmers have had a rougher go. AMC Networks was basically flat for the first half of the year (rising 1.9%). MSG Networks, which rode speculation that it could be a target of Sinclair Broadcast Group before Sinclair in late May reached a deal to buy 21 regional sports networks from Disney, was down by 9.1%.

World Wrestling Entertainment rose about 3% between Dec. 31 and June 19, as investors questioned the continued strength of its programming and its guidance for the first half of the year.

WWE’s sluggishness has more to do with investor expectations than performance, Routh said. It basically met its lowered guidance for the first quarter and should rebound in the fourth quarter.

Dish Network, down 28% in the first half of 2018, totally reversed that decline in the first half of this year, rising 55.8% between Dec. 31 and June 19. Fueling that growth was speculation that the satellite company would merge with DirecTV, or that it would purchase one of the expected castoffs of the T-Mobile-Sprint wireless merger, Boost Mobile. That deal was expected to be done as soon as last week, but no transaction had been announced at press time.

AT&T rose 13.6% during the period, after clearing the federal government’s second attempt to block its merger with Time Warner Inc. in February. Despite heavy losses at its satellite unit — DirecTV shed about 626,000 satellite-TV customers in Q1, while its OTT service, DirecTV Now, lost 83,000 in the quarter — the stock was buoyed by plans to launch a third OTT offering by the end of the year.

The FAANG stocks — Facebook, Amazon, Apple, Netflix and Google — all performed well in the period. The stocks were up a combined 21.5% in the first half of 2019, below the 34% growth they experienced in the prior year. Facebook, which has faced intense government scrutiny over its handling of customers’ personal data, saw its stock rise 43% in the first half, from $131.09 on Dec. 31 to $187.48 on June 19. Netflix was a close second, gaining 35.8% in the first half as it continued to dominate the SVOD landscape.

Amazon, up about 27% during the period, dipped its toes further in the content waters in the first half, partnering with the New York Yankees in that team’s purchase of regional sports network the YES Network. Apple, which was up 25% in the period, unveiled its Apple TV+ product in March to a somewhat tepid response. The service, which appeared to be light on compelling original content compared to its competition, is expected to be priced at $9.99 per month when it launches later in the year.

At least for the first six months of the year, though, cable distribution was the main story. And for Routh, that momentum should carry the stocks through the rest of the year and beyond.

“Everyone thinks distribution is going to do fine, they’re not worried about the value,” Routh said. “Content is a question. Unless you’re the size of Disney, how do you value it, how do you get comfortable? It’s that simple.”

"Deep Packet Inspection can play a key role within cable operator networks; e.g., for traffic engineering and network security. But it presents significant shortcomings in holistically analyzing subscriber activity, which is key for both retention and growth." —Kate Mitchell, Edge Intelligence

Cable providers are at a critical juncture.

The number of consumers abandoning TV subscriptions for over-the-top offerings continues to grow. At the end of Q1, 3.4% of households cut the cord over the prior year, the highest rate ever, leaving about 83 million households paying for cable services in the U.S. This doesn’t include the increasing numbers among new households and younger demographics that have never subscribed to a pay TV service in the first place, a.k.a., “cord-nevers.”

Currently, approximately 13.5 million households (14% of all households) don’t pay for traditional forms of TV service. By 2021, eMarketer predicts, the number of cord-cutters will nearly equal the people who never had pay TV — a total of 81 million U.S. adults.

While this may all seem like doom and gloom for cable MSOs, it’s actually an opportunity to stop the cord-cutting trend and also win over cord-nevers through innovation. For cable operators to quickly turn the tide, it will require a stronger understanding of their subscriber base, or deeper than what’s possible with Deep Packet Inspection (DPI).

Seeing the Limits of the Old

DPI has been the default method over the past decade for examining and managing network traffic; it runs in line with production traffic or sends copies of packets to a network monitoring connection to inspect packets flowing through the network. Data is extracted from within each packet.

DPI can play a key role within cable operator networks; e.g., for traffic engineering and network security. But it presents significant shortcomings in holistically analyzing subscriber activity, which is key for both retention and growth.

What are those obstacles? First, it’s very challenging and costly to scale a DPI offering since it relies on inspecting at the packet level, on every port, at increasingly high network speeds. In addition, it can be difficult and immensely time-consuming and labor-intensive to gain customer insight from DPI systems since the hardware can be siloed and spread across many locations deep inside the network.

So how can cable MSOs obtain the subscriber insight they need to positively impact their business?

New Analytical Architectures

Big data analytics — the process of examining large and diverse data sets — can enable MSOs to discover hidden patterns, previously unknown correlations, customer preferences and other highly useful information to help them make more informed business decisions. And network data for cable operators is big, with hundreds of billions of records added daily, generated from millions of subscribers, and the need to retain trillions of records for analysis and compliance purposes. 

So the collection, real-time correlation, analysis and retention requirements placed on the analytical architecture are demanding — and many big data architectures are unable to keep pace. Analytics should provide the granular insight into and throughout the entire customer lifecycle that cable providers need to effectively support things such as usage-based billing, support-related inquires, proactive upgrades to bigger plans and anticipating those likely to churn. That knowledge can help inform activities directly geared to current and prospective subscribers.

For example, with the knowledge of subscriber behaviors garnered from big data analytics, cable providers can grow revenues through initiatives such as targeted promotions and customized product offerings. For those predicted to churn, better customer service and incentive offers may help in maintaining their business.

And for consumers who no longer subscribe to cable services but do still have data plans, providers can use big data analytics to determine their OTT viewing, web content and download data so they can figure out how best to monetize this use of their network. With this deep level of knowledge, cable providers can have accurate insight on data consumption to make sure usage-based billing and capped data tiers can capture revenue to offset what they’re losing from paid TV.

Going Deeper

While DPI still has an important role in supporting cable MSOs, it’s not cutting it in this time of cord-cutting. What’s needed is a way to understand subscribers on a deeper level than DPI can provide. By being able to better analyze the immense amount of data that’s available, cable providers can be well positioned to provide customers with personalized offers that resonate, incentives that motivate and service that delights — helping providers to retain and grow their business.

Kate Mitchell is CEO of Edge Intelligence, a distributed analytics platform.

Once relegated to the sidelines, retail locations are increasingly becoming the new face of cable companies, allowing customers not only to pay their bills and pick up equipment, but to try out new services in a relaxed, high-tech atmosphere.

Comcast arguably unveiled the new face of cable in 2015, when it announced plans to revamp its Xfinity stores across the country, turning its retail locations into cable versions of Apple’s Genius Bars. With sleek lines and stacks of high-tech equipment, big-screen TVs and video game consoles, the stores not only showcased what Comcast had to offer, but educated customers in the nuances of broadband, home security and control and all they could do with those services.

Related: Helping Subscribers Help Themselves

Back in 2015, at the launch of its flagship Studio Xfinity in Chicago during INTX: The Internet & Television Expo, Comcast chairman and CEO Brian Roberts said the operator saw the new retail initiative as a huge opportunity.

“As we improve the service and offer more and more products, customers are saying ‘Gosh, I didn’t know I could do that,’” Roberts told Multichannel News at the time.

Comcast has since built or refurbished 258 Xfinity retail stores across the country, with new plans to upgrade the experience even more. Clearly Comcast, and others, are seeing the power of putting on a good face.

Charter Communications is revamping hundreds of Spectrum stores across its footprint, partly in anticipation of the planned June launch of its wireless product. Cox Communications has more than 100 Cox Solutions stores across its footprint and Altice USA opened Optimum Experience Centers in Long Island, N.Y., and Paramus, N.J., where customers can interact with new products like the Altice One hub, “smart home” offerings from Nest and see high-speed internet demonstrations. The Experience Centers are separate from the company’s Optimum retail walk-in stores that continue to handle all exchanges, returns and requests for equipment and in-person bill payments.

Comcast vice president of retail John Giacomazzi said Comcast has conducted reams of research, and has spoken with employees and individual customers to make the normally transactional nature of customer interactions more palatable. In the retail business, he added, if a customer walks in with a piece of equipment to return or repair, they are met at the door by a greeter, who takes the equipment, gives them a receipt and encourages them to browse around the store while their transaction is completed.

The retail location is set up in zones — X1 for entertainment, home security and the connected home, internet and Xfinity Mobile. Within each of those zones, the product is on display so they can use it themselves or be walked through its operation by a sales consultant.

“It’s a much brighter retail store experience and [has] more of a residential feel, as opposed to an industrial service center,” Giacomazzi said. “It’s a warm environment. We have solid oak floors; we have bright lights and a very neutral palette. Everything is out and open and available for receiving a customer’s touch and engagement.”

The stores are also in high-traffic retail areas, such as malls and shopping centers, away from the more industrial office park locations of the past.

“We’re with traditional retailers — Apple and Sephora, Starbucks, Pottery Barn, Williams-Sonoma,” Giacomazzi said, adding that most of the stores are standalone, but the company has a few mall locations coming up. Comcast expects to add more than 50 new stores throughout the footprint this year alone. The goal, he said, is to eventually have every customer within a 15 minute drive of an Xfinity retail location.

The stores also are chock full of accessories like new xFi pods — plug-in devices that extend the reach of WiFi service throughout the home — as well as cell phone cases, protection, power, speakers and headsets.

“We’re expanding the complementary accessories,” Giacomazzi said, adding that Comcast is moving toward accessories that will enhance the overall experience. “If you are streaming or DVR-ing your content away from home, we have a nice headset that will help you listen to that content.”

Cox Communications senior vice president of customer care Peter Lilly agreed, adding that at Cox Solutions stores, Cox sells everything from lightbulbs to modems.

“It’s not meant to break the bank as much as make sure that customers are getting the most of what they want from us as a full service business,” Lilly said. “It’s as much about retaining a customer, making sure we’re adding value and sharing knowledge about what our products can do for them. We want somebody when they walk in to pay their bill to know not only that their bill was paid, but to learn something new about their products and services. Maybe it’s something they are already paying for, but they didn’t understand how to get the most out of it. That’s another benefit for us and a value-add for the customer long-term.”

Few industries collect more intricate data about a person’s media consumption than cable operators — and few are as highly regulated.

Cable operators, as the conduit by which most of us access entertainment and internet, are privy to reams of customer information ranging from what shows an individual watches, what room in their house they watch it in, the websites they surf and the credit cards they use.

But the industry and the government, perhaps anticipating the onslaught of privacy issues collecting that information could bring, have put in place safeguards to ensure that data is protected.

Related: Specter of D.C. Crackdown Looms Over Edge

The Cable Act of 1996 severely limits what a cable operator can do with the data it obtains. According to Section 661 of the act, a cable operator can use personally identifiable data only to deliver service to that person. It can share that information with a third party only with the prior written consent of the customer, or to comply with a court order.

While that would seem to hamstring operators, they have been able to use the data they glean from customer habits mainly to improve service — like being able to detect and rectify service problems in specific areas of their networks — and to offer additional services. As one operator put it, if they notice a customer isn’t taking phone service from the cable company, or may be downloading content that would warrant a faster internet speed, they can contact that customer directly.

Privacy Pledge

Cable operators have also gone the extra mile. Many, such as Comcast, Cox Communications and Charter Communications, have pledged to never sell personal customer information to third parties. But even with those restrictions, operators can still do a lot with the data.

Most operators are reluctant to talk about how they use the information.

In an email message, Cox spokesman Todd Smith said the cable company, like others, uses personalized data to improve the customer experience.

“We know that when customers interact with us they want it to be efficient and respectful of them and their time,” Smith said in the email message. “We leverage data from interactions to enhance our ongoing efforts to improve the experience. We are specifically doing a lot of work right now to map several what we’re calling Customer Journeys (everything from marketing and order process, to install and promotion rolloffs/renewals). The quality of information we gather during these processes helps us better serve existing and new customers in the future.”

Privacy on the Edge: Legislators' Questions

At Canoe Ventures, the advanced advertising consortium that includes Comcast, Cox and Charter, head of business development, sales and marketing Chris Pizzurro said that while the uses of customer data are many, so are the restrictions.

For example, Pizzurro said MSOs regularly extract household IDs and device IDs from settops and broadband routers, “so the cable operator knows what is going on in your home; making sure the system is running the way it should.”

The operator can also use that information to market its own products and services to customers. But for Canoe, the restraints are tight. Pizzurro said that Canoe can only use customer information like household IDs and device IDs for troubleshooting purposes.

“It’s all very specific and geared toward our service assurance product,” Pizzurro said. “We can’t go out willy-nilly and use it for targeting purposes or other advanced ads things.”

Canoe Ventures, which originally was formed as an interactive advertising vehicle for cable operators, abandoned that tack about five years ago and has mainly concentrated on dynamic ad insertion of video-on-demand streams. That business has picked up considerably in the last half-decade. Pizzurro said five years ago, reaching 1 million ads viewed in a month would be a Holy Grail moment for the company. Today, 1 billion monthly ad views are commonplace.

“We’ve grown 20% quarter over quarter over the last five years,” Pizzurro said. “With all the data that’s flying through the system, we’ve managed to be good stewards and shepherds without incident.”

Pivotal Research Group analyst Brian Wieser said if any new regulation comes out of the Facebook hearings, it will likely be focused on the social-media platform and would probably benefit Google the most. The cable industry would have little to worry about, he added.

“If the entire industry is forced to implement it, you will probably see a deceleration in growth for the overall industry,” Wieser said. “My guess is that Facebook and Google will probably take share. There are going to be some smaller players who won’t justify being in business.”

SIDEBAR | CPNI 101 | by John Eggerton

Cable operators, in the provision of their traditional video service, have long had fairly strict rules about what they can and can’t do with the personal information they collect from subscribers (Customer Propriety Network Information, or CPNI).

According to the Federal Trade Commission, they must provide reasonable access to personal records they retain and provide an opportunity to correct any errors. They also may not disclose any of that information to a third party without “written permission” from their customers.

There are different, but similarly strict, rules regarding voice-over-internet protocol phone service information.

Cable MSOs sit in one of the more disrupted spots in the communications industry. By disrupted, we mean the easily changeable nature of customer loyalty, as consumers react to a less-than-perfect experience and the growing influence of other communications entities trying to acquire those customers. 

Consumers these days are increasingly willing to cut the cord and migrate to less-expensive streaming alternatives such as Roku, Google Chromecast and Apple TV. Leichtman Research Group data shows the clear reason why. An annual survey of TV households shows the average cable bill rose about 39% from 2011 to 2015, which is almost eight times the rate of inflation. The most recent cable bill average is now over $103 per month, with zero chance of that price remaining flat going into the next year.

Threats on Multiple Fronts

Bill sticker shock notwithstanding, cable providers must now face the new challenge of the eventual introduction of 5G networks delivering Gigabit performance, new fixed wireless access options and yet another unique ability to create a bundled offering that displaces the cable provider completely. Can you blame a customer with a high bill for looking at other options, especially from companies that can bundle services together just as well?

Cable MSOs have thus been forced to reshape their businesses, with much of that coming in the form of a complete digital transformation of infrastructure, and processes that help meet the expectations of consumers and business customers. Today’s cable networks have brought broadband access to households that now have become accustomed to HD and 4K video services and internet speeds of 100 Megabits per second-plus. Over the next few years, we can expect further digital transformation in the form of hybrid networks that provide higher capacity, less risk of delay or latency, lower power consumption and hopefully the ability to satisfy the end users’ demand for service at a price point that doesn’t increase the rate of cord-cutting.

With demand for internet bandwidth continuing to grow at more than 20% per year thanks to video streaming, enterprise cloud computing, big data, social media and mobile data delivery, meeting these demands must be cost-efficient, energy-efficient and reliable.

As we watch top-tier cable providers invest in fiber-to-the-home deployments, cable’s traditional fiber-coaxial networks will still provide the anchor points for service evolution and transformation, and will still have the capability to roll out new services, as ongoing investment has already been able to deliver more bandwidth.

Ongoing investments in the Converged Cable Access Platform (CCAP) and DOCSIS 3.1 have benefited the customer, with bandwidth performance metrics showing upwards of 10 Gbps downstream and 1 Gbps upstream. The embrace of CCAP has the transformative effect of increasing business agility, forging a smaller footprint, and creating lower power consumption and more IP video capability, giving the user more capabilities and enhanced security — all of which should help reduce total cost of ownership as a whole.

As SDN/NFV (software-defined networking/network functions virtualization) becomes a greater influence on the cable provider, one cannot discount the existing expectations and needs for what will be a hybrid network environment in the short to medium term. Cable providers will thus have physical and virtual functionality evolving in parallel. This, along with investments in remote PHY, which supports both FTTx (fiber to the x) and SDN/NFV initiatives, all contribute to the digital transformation around an IP network between the core and the node. The move to a virtualized, software-based architecture can help deliver network optimization, increase agility and create new opportunities for MSOs. However, any cable operator planning to reap the benefits from NFV and SDN must shift its focus from technology to business, and ensure all business support systems are up to the task. As a wise man once said, if you can’t bill for it, it’s a charity.

Virtualization Hits Home

Network-level virtualization will also transfer to the home, as we already see services move from a physical set-top box environment to an eventual virtual one. The $400-plus set-top box with a hard drive is set to be replaced by a cloud-based DVR that sources not just content, but applications such as program guides and DVR as cloud-based functions.

Cable MSOs will no longer be limited by the functionality of a dedicated set-top box and will make gains from much faster time to market for new products and services offered both from within and outside the cable provider. How about that customer call requiring a $100-plus truck roll to correct an issue that may or may not exist? It can likely be mitigated by a remote software update. What about replacing that $400 set-top box every three years or so? Virtual CPE means a $50 dumb box in the home can extract value from the cloud and be easily updated and configured on the fly and extends the life of home-based equipment. Analytics can also now be embedded in the cloud for easier data management and decision-making.

Can we calculate a long-term price for all of this digital transformation? For the cable provider, it means more innovation, faster delivery of new digital services and a much “stickier” service environment to demonstrate to the customer that all this innovation is actually worth paying for. That translates to retention.

And let’s face it: If cable bills aren’t going down any time soon, creating a product and service advantage will be a paramount requirement for the industry in the coming years.

Paul Hughes is director of strategy at Netcracker Technology.

If you’re a cable subscriber, you’ve been a participant in the slow but steady transformation of a complex and multifaceted industry. While most consumers may think that turning on the television to watch CNN or stream Netflix is a simple process, making these processes work seamlessly has been years in the making.

The television was once the central component of our home entertainment experience; now, it could be a wireless phone or tablet, laptop or other screen-based device. Consumers with 4G/LTE-connected devices can get HD-quality pictures without the need for WiFi, and the wireless providers have created packages to lure them to do exactly that. Competition has cost the cable industry a large portion of younger audiences, who now use Apple TV, Google Chromecast, Roku or their wireless devices to stream online services such as Hulu, Netflix and Amazon. These new options create business headaches for the cable companies, who must either coexist, cohabitate or partner with these content providers.

Related: Millennials More Likely to Stream, Less Likely to Avoid Ads

What does this mean for cable MSOs? It means a forced hand to innovate, and likely faster than they’ve been used to. Over the past five years, we have seen investments in fiber, expansion into wireless services, higher broadband speeds and a broader service portfolio. This is all happening in areas where many U.S. consumers only have a single cable provider or ISP they can subscribe to.

However, the competitive threats from outside have also been a driving factor in forcing these changes. Together, these influences have driven providers to look further than the service-centric portfolio, into operational efficiency, customer support, workforce management and in a generic sense, greater levels of automation — and all done without causing any disruption to services.

Related: Global OTT Video Viewing Doubles, Conviva Finds

The cable and broadband industry’s focus of all this innovation must been centered on one key outcome — customer retention. The reasoning is simple: Regardless of what may be a broadband monopoly in certain markets, consumers are still cutting the cord. Research firm eMarketer states that in 2017, a total of 22.2 million U.S. adults will have cut the cord on cable, satellite or telco TV services. That is up 33% from 16.7 million in 2016. Enterprise customers are a growing portion of the total base but remain a small fraction of the overall business today. These numbers paint a somewhat dire long-term picture for the industry. That makes the customer experience one of the most, if not the most critical factor that companies must embrace, and the cable industry must take note.

Investing in the Customer Experience
Cable providers should be investing in innovation around the customer experience in both tactical and strategic ways. While some of these innovations may not be customer-focused, all are business-focused, which in turn has a direct impact on customer satisfaction, retention and churn reduction. Following are some of the more effective methods that can have a positive impact on the customer relationship.

Intelligent Use of Net Promoter Scores For Both Organization and Employee: Investment in the right tools to gathering data at every step of the customer lifecycle is one of the best real-time methods to gain access to customer expectations and sentiment. Cable providers should be gathering NPS regarding home installs, follow-ups to calls or visits designed to speed problem resolutions, and all activities concerning issue resolution.

Greater Use of AI and Analytics For Network Performance Management: The use of a broad range of tools to measure network performance, node health, enhanced correlation across a broad range of end points and workforce guidance on next best action creates process efficiencies that help eliminate customer facing problems.

Increased Use of DevOps to Speed Innovation Cycles: DevOps is gaining ground across the entire communications industry as a way to accelerate product development, increase efficiency and become more responsive to changing customer and business needs. The DevOps methodology can offer the cable MSO major advantages as they take on digital transformation and address customer expectations. These include accelerated time-to-market for new services, increased flexibility and optimized cost-efficiency.

Virtualization, Starting With vCPE/vCCAP: The move to virtualization in cable is well underway. CableLabs, in a recent Open Networking assessment, said the combined technologies will lower OpEx and CapEx and increase revenues from new services provided to consumers. MSOs also have the opportunity to leverage the newfound flexibility of virtualizing service endpoints, pushing cost at the end-point level down, and moving functionality to the cloud. Going to a virtual CCAP architecture migrates the current headend from RF to digital, allowing the MSO to provide IP centric services (video and data) from the headend to the node. This in turn removes the need for a physical CCAP/CMTS, reducing costs, complexity and still allowing for easy integration into the cable provider’s existing OSS/BSS.

vCPE lets the MSO place a low cost “dumb box” in the home and have all services and operations fed directly from the cloud. This translates into reduce costs for hardware, more “plug and play” functionality, fewer truck rolls to the home to replace out-of-date CPE, and the ability to push more innovative services more quickly, keeping the customers engaged and loyal.

Winning the Retention Game
While each of these innovations is more or less invisible to most cable customers, the investment in each provides a tangible benefit to the customer journey and experience. The rising expectations of the customer will continue to drive innovation and created disruption across the IT landscape. Opportunities to serve the customer have never been more significant, and the biggest changes are yet to come. If innovation still has a predominant focus on customer outcome, then the cost of that innovation will ultimately be “priceless.” In today’s competitive market, that’s a cost worth investing in.

Washington — Federal Communications Commission chairman Ajit Pai is proposing major deregulation of broadband business data services (BDS) — such as credit card readers, ATMs and institutional hookups — and that’s good news for cable ISPs looking to get a bigger piece of that business without government restrictions.

While former FCC chairman Tom Wheeler’s proposal initially imposed potential new rate regulations on cable Internet-service providers and reimposed them on incumbent providers, Pai mostly sees a booming, competitive business in business broadband.

“The extensive record compiled by the commission’s excellent staff shows substantial and growing competition in many areas of the country, thanks to new market entrants like cable companies,” Pai said in a blog post.

Pai is extending his deregulatory view to that marketplace with a proposed report and order he plans to vote on at the April meeting.

‘VIGOROUS’ MARKET
Generally, the new takeaway from that proposal is that competition for most business broadband services is “robust and vigorous” and legacy regulations are “more likely to impede the introduction of new services and raise prices than to benefit consumers.”

That’s in contrast to the Wheeler proposal, which was predicated on the assumption that incumbent providers were levying “artificially high prices being charged to small businesses, schools, libraries and, ultimately, consumers.”

Scott Cleland, chairman of the ISP-backed NetCompetition, said, “Everything the Pai FCC has signaled so far is much less regulation of the BDS market not more, and that is very good news for more competitive infrastructure investment.”

Cable is recognized as a major force in the order, a dramatic change in the market over the past decade. “Cable providers have emerged as formidable competitors in this market,” citing stats from MoffettNathanson principal and senior analyst Craig Moffett that cable’s annual BDS growth rate has been 20% over the past few years, as it takes on the incumbents and competitive local-exchange carriers.

That translated to a $12 billion piece of the BDS market in 2015, said the FCC, with a projection for that share to double by 2019.

Cable operators, including NCTA: The Internet & Television Association, had pushed the FCC this time around to clarify that some broadband business services are private carriage not subject to the requirements of Title II of the Communications Act, such as “just and reasonable” rate regulation.

The order delivers that clarification, or at least it proposes to do so, confirming that cable operators can offer BDS service as a private carriage service not subject to Title II regulations. That would allow smaller operators that might not typically offer BDS to provide one-off offerings for specific customers.

Cable operators had sought that flexibility under the Wheeler proposal, but the idea did not get traction.

The FCC also concluded that having a competitor “nearby” is sufficient to qualify a market as competitive or, as the order puts it: “Traditional and nontraditional providers of business data services constrain an incumbent’s pricing outside of immediate geographies used to describe market concentration” in the Wheeler proposal.

The order cites cable as such a competitor, using as an example a cable company with “nearby” fiber nodes and the ability to provide Ethernet service over either fiber or hybrid fiber coax.

While the thrust of the order is to deregulate the price cap on incumbent carriers such as AT&T and Verizon Communications, a deregulatory tide lifts all boats.

At first blush, it might appear to be an advantage to have your competitors reregulated. A cable executive speaking on background, though, said that subjecting competitors to rate regulation is frequently “not a good thing.”

For instance, he suggested, were the FCC to cap rates at cost for an MSO’s ILEC competitor, cable operators would be forced to compete at that capped price. Thus, the free market of rates Pai is aiming for is preferable to self-regulating at a competitor’s level.

Being able to provide BDS as a non-common carrier service is one advantage, as is not subjecting cable operators to a new category of rate regulations should they invest to compete against the ILECs.

CLEC PUSHBACK
INCOMPAS, which represents the competitive telecoms that backed Wheeler’s regulatory approach to ILECs, was pushing back last week, looking for proof of the FCC’s assertion that most markets (92%) were sufficiently competitive to preclude price regulations to prevent monopoly and duopoly pricing.

Invoking the transparency chairman Pai has been pushing, INCOMPAS called on the FCC to release that information before the April 20 vote.

“It is critical to a thoughtful and reasoned consideration of this order to be able to assess exactly what that means, and how many small and medium-sized businesses and critical community institutions could face dramatic price hikes,” INCOMPAS said.

SIDEBAR: Tale of the Tape
According to an FCC summary, the agency’s new business data order, scheduled for a vote April 20, would:
■ “Confirm that certain competitive offerings constitute private carriage.”
■ ”Find that competition for lower-speed services (DS1s and DS3s) is robust in some, but not all, counties, and apply a competitive market test to determine where actual and potential competition is likely to constrain prices and lead to additional investment.”
■ “In areas with sufficient competition, modernize rules to facilitate additional infrastructure investment and next-generation services by ending tariffing and other legacy pricing regulations.”
■ “In areas without sufficient competition, maintain price caps …”
■ “Grant carriers additional flexibility to offer discounts in such areas to schools, libraries, r ural healthcare clinics, and other special access customers.”
■ “Ensure continued Commission oversight by prohibiting the use of agreements that would bar disclosure of contract terms to the FCC going forward.”
— John Eggerton

RELATED > Four for the Money: Consolidation Wave Creates Top-heavy List of Pay TV’s Largest Players

1. AT&T-DirecTV
Subscribers: 25.3 million
As the undisputed MVPD leader for the second year in a row, AT&T has turned its eyes toward over-the-top distribution (DirecTV Now) and content, via the pending $108.7 billion purchase of Time Warner.

2.Comcast
Subscribers: 22.5 million
After six straight years of improved losses, Comcast finally entered the black in 2016, reporting its first full year of basic videosubscriber growth (161,000 customers) in a decade.

3.Charter Communications
Subscribers: 17.2 million
Six months after it closed the purchases of Time Warner Cable and Bright House Networks, Charter was said to have caught the eye of Verizon, a combination many consider too costly and too hard to pass by regulators.

4.Dish Network
Subscribers: 13.7 million
Dish surprised analysts by adding 28,000 net new subscribers in Q4, primarily driven by growth at its over-the-top service Sling TV. Sling added 273,000 customers while traditional satellite lost 245,000, according to analysts’ estimates.

5.Verizon Communications
Subscribers: 4.7 million
Verizon has been shedding some of its Fios TV assets — it sold 1.1 million customers to Frontier Communications last year — leading some to believe it is abandoning its wireline business for a mobile strategy.

6.Cox Communications
Subscribers: 4.1 million

7. Altice USA*
Subscribers: 3.6 million

8. Frontier Communications
Subscribers: 1.5 million
Frontier closed its $10.5 billion buy of Fios TV assets in California, Texas and Florida last year, suffering a series of outages after the “flash cut” switchover. Frontier said it has ironed out those problems and is fully committed to video.

9. Mediacom Communications
Subscribers: 828,000

10. WideOpenWest
Subscribers: 486,400
The sale of WOW by longtime cable private equity player ABRY Partners to Crestview Partners last year marked the industry return of a cable pioneer, namely former Marcus Cable CEO and current Crestview partner Jeff Marcus.

11.Texas Pacific Group (TPG)
Subscribers: 377,000
The new kid on the MVPD block, TPG vaulted to the No. 12 spot after purchasing RCN and Grande Communications in a deal valued at $2.25 billion.

12. Cable One*
Subscribers: 329,386
After taking a broadband-centric tack in 2012, Cable One’s video customers are down to 330,000 from 600,000. A possible seller, but bought New Wave Communications systems in January for $735 million.

13.CenturyLink-Prism
Subscribers: 325,000
High programing costs are pushing CenturyLink to de-emphasize the Prism IPTV product in favor of Prism Stream, an over-the-top offering expected to launch in Q2. Next up: closing its $34 billion merger with Level 3 Communications.

14. Atlantic Broadband
Subscribers: 246,000

15. Armstrong Cable
Subscribers: 219,700

16. Midcontinent
Subscribers: 218,300

17. Service Electric
Subscribers: 188,000

18. Blue Ridge Communications
Subscribers: 150,000

19. Telephone & Data Systems
Subscribers: 144,700

20. Wave Broadband
Subscribers: 138,000

21. Cincinnati Bell
Subscribers: 137,600
Cincinnati Bell took up the skinny bundle mantle in March 2016, launching Fioptics MyTV, a low-cost, 50-channel bundle geared at more price-conscious customers.

22. Buckeye/Block Communications
Subscribers: 128,000
Owned byToledo Blade publisher Block, Buckeye Cable launched in 1965, followed by business net Telesystems in 1997 and prepaid broadband service Nymble last year.

23. General Communication Inc.*
Subscribers: 108,900

24. NewWave Communications**
Subscribers: 86,000

25. Metrocast/Harron
Subscribers: 86,000

*Q3 figures
**NewWave agreed to be purchased by Cable One in January.

SOURCE: Individual companies, SNL Kagan,industry associations, published reports and Multichannel News estimates

Today's list of top 25 MVPDs may be the face of pay TV distribution for several years to come.

Consolidation hasn’t broken up all of the old cable gang just yet, but it has shifted the rankings of the top pay TV providers in the country. New entrants such as Texas Pacific Group, which bought Grande Communications and RCN last year, have come on the scene, as old stalwart Charter Communications, which closed on its purchases of Time Warner Cable and Bright House Networks in May, more than quadrupled its size.

But as AT&T — the biggest distributor for the second year running — now looks toward content with its pending mega-purchase of Time Warner Inc., some observers believe the age of consolidation has ended almost before it really had a chance to start.

“The industry is exiting a period of unprecedented consolidation among pay TV distributors,” Morgan Stanley media analyst Ben Swinburne said in a recent research note. “From [2015] to [2017], two major mergers led to media companies suffering from significant reductions in distribution fees, but the industry is now lapping those effects.”

The “Core Four” of AT&T, Comcast, Charter and Dish Network are expected to hold their positions for the foreseeable future, partly because none are likely to be involved in any major distribution deals in the near term and partly because if they are on the hunt for additional scale, the resulting deals probably wouldn’t move the needle much.

See the full list of Top 25 MVPDs.

BEYOND THESE: 635 MORE
The top four MVPDs control more than 80% of the 96.7 million homes represented on the list. Overall, the 25 service providers control about 96.7 million homes, or about 88% of the 110 million U.S. TV homes. With that much power concentrated in the Top 25, that doesn’t leave much for the 635 other cable operators across the country.

So unless another mega-deal is in the cards — and, despite the notion of the Trump administration’s laissez-faire attitude toward mergers, any deals involving the top four MVPDs will more likely involve a wireless provider than a pay TV distributor — the list might stand pat for at least a while.

That theory was tested earlier this month when reports surfaced that Verizon (No. 5) had approached Charter (No. 3) about a possible hookup. But even if you disregard potential regulatory and financial hurdles — most analysts think it would cost too much — combining Charter with Verizon wouldn’t push the combined company past Comcast on the list.

So much for the transformative power of scale.

“It’s hard to envision any more large-scale M&A, outside of possible wireless deals, for the next few years,” MoffettNathanson principal and senior analyst Craig Moffett toldMultichannel News. “Altice might be able to scoop up a few smaller players, but the top end of the industry is probably intractable.”

And there have been deals in the wake of Charter’s $90 billion (combined) purchase of Time Warner Cable and Bright House Networks. European telecom company Altice N.V. made the biggest splash: It snapped up Suddenlink Communications for $9.1 billion in December 2015, adding Cablevision Systems’s nearly 3 million New York-area subscribers less than a year later (June 2016) for $17.7 billion. Altice is currently taking a breather, but it could be a major player if it goes ahead with an expected initial public offering of a minority stake later this year, which could go toward cashing out some investors and providing a currency for further deals.

The year also saw new entrants (Texas Pacific Group’s $2.25 billion purchase of Grande and RCN), the return of old friends (Crestview Partners’s recapitalization of WideOpenWest) and surprises (Cable One’s $735 million purchase of NewWave Communications).

Most analysts had expected Cable One to be a seller. The midsized Phoenix-based operator embarked on a broadband-centric strategy about four years ago, forgoing cable subscriber growth to concentrate on higher-margin broadband customers. Since then, Cable One’s video customer base has dwindled from nearly 600,000 in 2012 to 329,386 in the third quarter of 2016, the latest information available. At the same time, broadband customers have grown from 459,000 in 2012 to 461,000 in the third quarter.

Meanwhile, telcos such as AT&T, which have also seen video declines, are turning their eye toward content. AT&T in October agreed to purchase Time Warner in a deal that (including debt) will set it back about $108.7 billion.

CINCY BELL MOVES UP
On the distribution side, consolidation in the wake of the Charter-TWC deal has transformed the bottom half of the Top 25 list. New entrants like Cincinnati Bell, which wouldn’t have broken the top 25 five years ago, debuted on this year’s list at No. 21.

Other telcos that have had strong past showings may be throwing in the traditional pay TV towel for an over-the-top strategy. CenturyLink’s Prism TV, which has been a steady presence in the IPTV arena, rose to 13th place this year from the No. 16 spot in 2015. But the company, citing increasing programming costs, is “de-emphasizing” IPTV in favor of Prism Stream, a new OTT product set to launch in the second quarter.

But as Moffett said, all could change — at least for the bottom half of the list — if Altice goes through with its planned IPO of a minority stake in its U.S. assets.

Telsey Advisory Group media analyst Tom Eagan expects the Altice IPO will not only unlock value — assuming mid-8-times-cashflow multiples on the other divisions, the implied value for the USA group is negative — but also could be used as currency to acquire other cable systems. Possible targets could be Cox Communciations and Mediacom Communications, Eagan speculated.

“Of course, they could split the targeted systems up with another cable buyer if they didn’t want to take on the incremental debt load alone,” Eagan said in an email message.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak agrees that more deals are to be done involving smaller companies outside the top five on the list, led by Altice, which he believes has the most capacity to bid aggressively for assets.

“Altice’s involvement in the U.S. is a game-changer, given their ability to take significant costs out of the business and upgrade their plant at dramatically lower costs than their peers,” Wlodarczak said.

Adding to the pressure to gain scale are rising programming costs, which puts smaller operators “in a position of either selling to a player such as Altice or moving to data-only (Cable One) strategy,” he said.

The political environment also could play a role in cable companies deciding whether or not it’s worthwhile to combine. And that’s not only because of regulatory changes expected in the Trump administration and a more favorable stance on big business combinations.

“Perhaps the biggest wildcard for consolidation among the smaller players is tax reform,” Moffett said. “Depending on how things break in Washington, you could imagine that the tax code could create a window that would make it hard for family-owned cable operators not to at least consider cashing out.”

The programming landscape has changed dramatically in the past several years, with the advent of subscription video-on-demand and over-the-top players further complicating an already convoluted negotiating process.

Today’s programming executives at large, midsized and small pay TV service providers have to be schooled not only in the economics of traditional linear networks, but also in the nuances of online offerings, over-the-top, TV everywhere and video-on-demand rights.

Programming deals that a few years ago took only a few distribution professionals to hammer out now require dozens, and conversations can get just as bogged down and lengthy over the definition of “Internet” as they do over per-subscriber fees and ratings points. Terms like “stacking rights,” which didn’t exist just a few years ago, are now a regular part of the discussions.

As Mediacom Communications executive vice president of programming and human resources Italia Commisso Weinand put it, brands are becoming less important as younger viewers grow attached to individual shows and disregard the networks carrying them.

While a large contingent of television viewers still watch on the big screen at home — something the networks continue to bank as those subscribers increasingly pay the freight — the business is fragmenting and could splinter even more as time wears on.

Add to the mix the consolidation already underway in the distribution sector, spurred by Charter Communications’s $78.7 billion purchase of Time Warner Cable and Altice USA’s deals to buy Cablevision Systems and Suddenlink Communications, and the soup gets thicker. The mergers have led to a reshuffling on the distributor side of the negotiating table, with the people programmers need to know when they pitch their content changing jobs.

Content negotiations aren’t expected to get any more cordial as the business changes, but Commisso Weinand said they have gotten a little less contentious. Issues like pricing, sports costs and skinny bundles will be at the top of the list of pain points for both programmers and distributors for the foreseeable future. But Commisso Weinand is beginning to see a slight change in attitude.

“Not a lot has changed, however, the cockiness has been tempered somewhat,” Commisso Weinand said.

There have been changes, though, among many of the top content-acquisition executives at pay TV providers, so it’s a good time to take a look at who these “gatekeeper” executives are and to check in with some of them in sidebar conversations.

Spotlight on Mediacom's Italia Commisso Weinand: Tough but Fair

AT&T/DirecTV |Dan York
Chief content officer

York has come full circle with AT&T following its July 2015 purchase of DirecTV.

He first worked for AT&T in 2004 as president of content and advertising sales. He left in 2012 to take over programming negotiating duties at DirecTV as chief content officer and returned to the telco last year after it bought DirecTV in a $48.5 billion deal.

A seasoned executive who knows how both sides of the table work — prior to his first go-round with AT&T, York had served stints with InDemand and Home Box Office — York wields considerable clout as the top programming dealmaker for the largest MVPD in the country, with 26 million video customers.

AT&T has an iron in several content fires, which should make York’s days chock full of activity – it is migrating video customers off its U-Verse platform (which York helped form) onto DirecTV; DirecTV is readying an OTT service called DirecTV Now for launch by the end of the year; and AT&T has said mobile video, with its myriad and complicated programming rights issues, is a top priority in the future.

Key Lieutenants: Michele Barney, vice president of content and programming; Todd Mathers, senior vice president of content and programming; Rob Thun, senior vice president of content and programming

Comcast |Greg Rigdon
Executive vice president, content acquisition

Comcast has cut some landmark programming deals over the years — its comprehensive 10-year carriage deal with Walt Disney Co. in 2012 is largely considered the template for the industry — and Greg Rigdon has been in on many of them.

Looking forward, the content chief will have the chance to make history again, possibly, as Comcast’s programming deals with 21st Century Fox are expected to come due at the end of the year. Besides potentially laying new ground with iconic Fox cable networks like Fox News Channel, FX and FX Movies, the negotiations will also give Comcast the opportunity to revisit Fox’s YES Network regional sports channel, the home of the New York Yankees. YES has been dark to Comcast customers in the New York area since November 2015, over pricing and rights disputes. Some observers have said that Comcast has been waiting for all of its Fox deals to come due before addressing its YES challenge.

Prior to joining Comcast in 2010, Rigdon was executive vice president, programming, business development and strategy, at Charter Communications. He also previously held senior roles in programming strategy, business affairs and commerce, at AOL.

Key Lieutenants: Jennifer Gaiski, senior vice president, content acquisition, Comcast Cable; Sarah Gitchell, senior vice president/deputy general counsel, Comcast Cable; Justin Smith, senior vice president, content acquisition, Comcast Cable

Charter Communications |David Ellen
Senior executive vice president

Ellen came to Charter in July, through a portal that has been common for many company executives in the past two years: service at Cablevision Systems. As senior EVP, Ellen is in charge of corporate functions, including programming, news and sports networks, strategic policy development, regulatory compliance, human resources, communications and security. He will also oversee the legal support for those units.

Charter completed its purchases of Time Warner Cable and Bright House Networks in May, quadrupling its subscriber base to 17.4 million customers from around 4 million. With that added heft, Charter is expected to enjoy considerably lower programming costs. Charter itself has said that about half of the expected $800 million in synergies from the merger will be the result of programming savings.

The company has tried to enjoy some of those synergies already: It is being sued by at least three programmers — Fox News Channel, Univision Communications and Showtime — that have claimed Charter’s interpretation of the merger allows it to pay lower rates until the end of the year.

Ellen has plenty of help. Charter recently beefed up the programming ranks, adding another Cablevision alumnus, EVP of programming acquisition Tom Montemagno (see below), earlier this year. Allan Singer, who served as SVP of programming for about five years, left earlier this year, citing an unwillingness to relocate from his Denver home to Charter’s Stamford, Conn., headquarters.

Ellen served as general counsel for Cablevision for several years, working closely with CEO James Dolan on all aspects of the business, before leaving shortly after the company’s purchase by Altice USA. Ellen had also led Cablevision’s successful defense of its cloud-based DVR product as well as the legal strategy supporting the rollout of in-home streaming of its cable services to IP-enabled devices.

Prior to Cablevision, Ellen was general counsel at Barry Diller’s Internet conglomerate IAC and at Eureka Broadband, a New York-based telecom company. Before that he was a special counsel at the Federal Communications Commission, working on the implementation of the Telecommunications Act of 1996, and served as a law clerk for Judges Stephen Breyer and Judge Ruth Bader Ginsberg when they were on the U.S. Court of Appeals, and for Justice Sandra Day O’Connor during her time on the U.S. Supreme Court.

Charter Communications |Tom Montemagno
Executive vice president, programming acquisition

Montemagno is the latest former Cablevision executive to join the Charter fold, signing on Sept. 6 to head up overall programming negotiations and reporting to Ellen.

Montemagno spent 27 years at Cablevision, most recently as executive VP of programming, and over the past three decades has served in several other roles, including senior vice president of programming acquisition and as the operator’s lead negotiator with content companies.

At Charter, Montemagno oversees negotiations with its full range of content providers, from the major multichannel media companies and regional sports networks to local broadcasters and niche international programmers. The negotiations increasingly extend beyond traditional “linear” programming rights to include video-on-demand and out-of-home streaming rights on multiple platforms.

Dish Network |Warren Schlichting
Executive vice president of marketing, programming and media sales

A veteran advertising and media executive, Schlichting oversees the acquisition and renewal of all programming content for Dish, including national broadcast networks and cable channels, Latino content, local broadcast stations and premium services such as HBO, Showtime and Starz. Additionally, Warren oversees Dish’s national marketing efforts and Dish Media Sales, the company’s advertising-sales division.

Schlichting took over the programming negotiation reins from current chief financial officer Steve Swain, who temporarily served as programming chief after EVP of programming Dave Shull left in 2014.

Schlichting has upheld the Dish tradition of aggressive programming negotiations fostered by its founder, chairman and CEO Charlie Ergen. Dish hasn’t been afraid to let channels go dark as it tries to negotiate better rates and expanded rights with content companies.

In the past month alone, Dish brought back NFL Network and NFL Red Zone, signing a new deal Aug. 2 after the nets were dark for seven weeks, and lit up broadcaster Tribune Media’s 42 stations in 33 markets on Sept. 3 after 12 weeks of darkness. Longer term, Dish signed multiyear deals with Turner networks like CNN and Cartoon Network in November (TBS and TNT were not set to expire) after a few weeks of darkness, and renewed with 21st Century Fox’s Fox News Channel and Fox Business Network after a nearly one-month blackout in January 2015.

Prior to joining Dish in 2011, Schlichting led Comcast’s advanced advertising efforts on multiple media and ad delivery platforms including broadband, interactive television and video-on-demand. Before arriving at Comcast, he was CEO of Hiwire, a Los Angeles-based technology company that provided online ad replacement software for Clear Channel and other radio station groups. He also served in executive positions for Morgan Stanley and the William E. Simon private equity group.

Key Lieutenants: Josh Clark, vice president of programming, Dish Network; Andy LeCuyer, vice president of programming, Dish Network; Izabela Slowikowska, vice president of international programming, Dish Network; Melisa Ordonez, director of programming acquisition, Dish Network; and Ankit Bishnoi, head of content acquisition for Sling TV

Spotlight on Cox's Andrew Albert: Engineers on Board

Cox Communications |Andrew Albert
Senior vice president of programming

Albert oversees all video programming provider relationships and content acquisition, including the negotiation of program carriage agreements with major content producers such as The Walt Disney Co., Turner Broadcasting System, NBCUniversal, Viacom and Fox. He is actively involved in setting the company’s video product strategy, including the deployment of TV everywhere, video-on-demand and high-definition services, as well as the company’s multicultural programming strategy.

Albert joined Cox Communications in 1995 as director of programming and was promoted to executive director of programming in 2002. In 2003, Albert was promoted to vice president. He was promoted to his current role in 2013. Prior to joining Cox, he served as director of programming and director of budgets and financial analysis for TeleCable Corp. in Norfolk, Va.

Prior to that, Albert was in the Financial Management Program and served as a sales and marketing analyst at General Electric.

Key Lieutenants: Suzanne Fenwick, vice president, content acquisition; Mark Gathen, vice president, content acquisition; Chris Tygh, vice president, content acquisition

Altice USA |Michael Schreiber
Chief content officer

Schreiber is responsible for Altice USA’s programming- related developments, negotiations and agreements covering all content platforms and reports to co-president and chief financial officer Charles Stewart.

Prior to Altice, Schreiber served as senior vice president, content acquisition for Comcast, where he led the execution of new media and digital content deals. Prior to his role at Comcast, Schreiber worked at NBCUniversal, most recently as vice president, business development, digital distribution, where he assisted in the founding, development and launch of Hulu.

Altice USA |Alan Dannenbaum
Senior vice president, programming

A Comcast alumnus, Dannenbaum works with Schreiber on programming-related developments, negotiations and agreements across all platforms.

Dannenbaum spent more than 20 years at Comcast in various roles before forming his own business, Dannenbaum Consulting, in April 2015. He had joined Comcast in 1993 as associate general counsel. He also served as executive VP of Satellite Services Inc., from 2009 to 2014.

Spotlight on Verizon's Ben Grad: Giving the People What They Want

Verizon Fios |Ben Grad
Executive director of content strategy and acquisition

Ben Grad leads Verizon’s companywide content acquisition efforts with major content providers and sports rightsholders, and manages financial and strategic analysis for the telco’s key content-related initiatives. He is responsible for content acquisition and strategy for Fios, including developing Fios’s multiplatform content offering.

Prior to joining Verizon in 2007, Grad was head of strategy at Fuse, where he assessed programming and new business opportunities. Previously, he was a member of Time Warner’s Corporate Strategic Planning Group, where he developed and assessed new digital distribution opportunities for Time Warner divisions. He also negotiated agreements and developed strategy at eLabs, Universal Music Group’s digital group.

Key Leaders: Tricia Lynch, executive director of content strategy and acquisition; Michelle Webb, executive director of content strategy and acquisition

Mediacom Communications |Italia Commisso Weinand
Executive vice president, programming and human resources

With nearly 40 years of experience in the cable industry, Commisso Weinand served stints with Comcast, Tele-Communications Inc., Times-Mirror Cable and Time Warner Inc. before joining her brother’s cable company, Mediacom, in 1996 as VP of Operations. One of the most respected programming executives in the cable industry, she is known for a tough but fair negotiating style and has helped engineer some of the landmark deals in cable, including a 2014 Walt Disney Co. pact that gave Mediacom access to authenticated WATCH and video-on-demand products, the ABC broadcast network and cable channels like SEC Network, ESPN Goal Line and ESPN Buzzer Beater.

Key Lieutenants: Barry Paden, group vice president, programming; Joseph Appio, vice president of programming; Glenn Goldsmith, consultant; John Woods, vice president, advanced programming

National Cable Television Cooperative |Judy Meyka
Executive vice president of programming

It may cater to small operators, but the National Cable Television Cooperative represents nearly as many cable customers as the biggest of the big operators — Comcast — with its 850 members tallying about 20 million subscribers across the country. Meyka, who has served stints at large operators like Media One, AT&T Broadband and Adelphia Communications as well as programmers like iNDemand in her 23 years in the business, is the group’s chief programming negotiator.

That experience helps Meyka bring a new perspective to the organization, and in her time there she has completed deals with multiple major programming partners and secured new agreements with independent programmers and new-to-market content providers.

That can come in handy because although the co-op has negotiating heft, not every member has to sign on to every deal. NCTC members range from larger operators like Cox Communications, with about 4 million customers, to tiny family-owned operations with just a few dozen customers, all with different programming needs.

While pricing continues to be the biggest issue around negotiating time, bundling, online, TV Everywhere and mobile rights have become increasingly important aspects of negotiations for all NCTC members.

That was evident in recent deals with AMC Networks, where NCTC was able to avoid a blackout by hammering out a deal that didn’t force members to carry all six AMC channels on their most popular tiers — and got a more modest price increase.

As the weather gets hotter, pay TV customers could be shedding their television subscriptions — along with their long pants and sweaters — in greater numbers, according to Sanford Bernstein media analyst Todd Juenger.

Juenger took a deep dive into the trend of pay TV customer “seasonality,” the annual summer decline in monthly video subscriptions as customers purportedly moved to summer residences or to more permanent homes. Summer is traditionally the most popular time of the year to move, primarily because it allows parents to settle in before the school year starts.

On a conference call, of which the analyst provided a transcript to clients, Juenger conceded that the seasonality phenomenon is nothing new. But what he found in his research is that summer pay TV disconnects could be a trigger for cord-cutting because, unlike in past years, the customers who cancel service in the summer don’t seem to be coming back. He pointed to last summer, when pay TV subscriptions rose substantially in the second and third quarters.

TRIGGERED LOWER GUIDANCE

Juenger said year-over-year pay TV subscriptions declined by 0.6% in the second quarter of 2015 (compared to a gain of about 1% in Q2 2014) and by 1.4% in the third quarter (compared to a 0.9% gain in Q3 2014). That sharp decline, he said, helped to trigger decisions by The Walt Disney Co. and Time Warner Inc. to reduce subscriber and financial guidance, which, in turn, fueled even more cord-cutting fears.

Cord-cutting wasn’t as bad in Q4 2015 and in the first quarter of this year, when video subscriptions were down about 0.9% and 0.4%, respectively. But Juenger said he sees the signs.

“We have a theory that summertime is now always going to be the worst time for cord-cutting, because that’s when people move and that’s their chance to cut the cord,” he said. “We have serious concerns that this summer is going to look like last summer.”

Not everyone agrees.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak said seasonal churn is commonplace in the pay TV business, and he sees no correlation with cord-cutting.

“I doubt it is that material of a driver,” Wlodarczak said.

Telsey Advisory Group media analyst Tom Eagan pointed to recent gains in the cable-subscriber universe — both Charter Communications and Time Warner Cable reported full-year video subscriber gains, while Comcast has consistently improved losses and reported a gain of 53,000 video customers in the first quarter, its best Q1 showing in nine years.

“If you look at the numbers, they continue to be pretty good,” Eagan said, adding that the summer is usually when churn is highest, and that’s likely to remain so. “Video is looking better than it has ever looked.”

The key to any increase in cord-cutting would be how attractive the alternatives are, Eagan said. While there have been some changes in products like Sling TV, which is testing a multistream service that includes regional sports networks, for the most part over-the-top offerings don’t offer the same value as pay TV.

“They [OTT] are nominally more attractive, not materially more attractive,” Eagan said.

Juenger argues that distributors aren’t the only ones affected by cord-cutters. With a declining subscriber base, network affiliate fees also fall. Couple that with an expected dip in advertising revenue growth and it could indeed be a long, hot summer for programmers.

Most networks have guided to slower growth in the second half of the year, Juenger noted, so that is not a surprise.

“The issue is how fast it will slow down,” Juenger said, adding that the Summer Olympics will be good for NBC’s ad sales but bad for every other network. He added that the loss of fantasy-football ad money — several states are deciding whether daily fantasy sports sites like FanDuel and DraftKings are gambling operations, or games of skill, which has caused a pullback in advertising on TV — and what he thinks will be the replacement of higher-priced scatter ad revenue with lower-priced upfront inventory all “conspires for an advertising slowdown.”

ACCOUNT REVIEWS CITED

Eagan said his main concern about the ad market is how much it will be driven by the slowdown of last year. In 2015, he said, several advertisers put their accounts up for review, which had an effect on total ad revenue.

“There was a slowdown in spending because of all the account reviews,” Eagan said. “To a degree, the significantly higher agency changes are catching up with us now.”

As a result, Eagan predicted that ad revenue could rise by the mid-to-high single digits for most programmers in 2016, compared to 1% to 8% declines in the prior year.

But that growth will depend on the company, Eagan said. In a research note last week, he predicted that ad sales would dip 2.5% for CBS in the second quarter, rising to 4% growth in the third quarter and 5.8% in the fourth quarter. At 21st Century Fox, ad revenue should spike 10.5% in the second quarter — fueled by Fox News Channel and the presidential election — and 11.9% in the third quarter before settling to 0.7% growth in the fourth.

The election, he said, could also impact local TV advertising.

“A lot of the regional advertisers that would spend locally, and spend higher on a CPM basis, can’t go local because of the elections,” Eagan said. “That should continue for the balance of the year.”

New York — The cable industry seems destined for wired-wireless convergence as consumers demand access to services in the home and on the go, but how MSOs will get there is far from certain.

Creating a mobile virtual network operator (MVNO) in partnership with an existing wireless carrier might work for some, and there’s still plenty of speculation that a large player like Comcast could someday make a move to buy a T-Mobile or Sprint if the opportunity (and the price) were right.

Future wireless and mobile strategies for the cable industry, as well as game-shifting 5G technologies, were among the key themes discussed at last week’s Inform[ed] Wireless conference in New York, an inaugural one-day event hosted by CableLabs.

FASTEST-GROWING SEGMENT

Wireless and mobility are becoming increasingly important for cable, Phil McKinney, CableLabs’s CEO, said, noting that those areas have become the fastest-growing segment at the R&D organization.

Beyond the ongoing Cable WiFi initiative, which continues to deploy hundreds of thousands of hotspots in various public and quasi-public venues, several MSOs around the world have worked out MVNO deals (General Communication Inc. of Alaska and Liberty Global, for example), operate their own mobile networks (Rogers Communications of Canada), or are mobile carriers at their core but are also expanding into cable (Vodafone, which now owns Kabel Deutschland of Germany and Ono of Spain).

“We’re seeing this converged network,” McKinney said, adding that consumers “don’t want that broadband service to stop at the front door.”

But how those strategies will evolve for many MSOs, particularly in the U.S., is still being sorted out and debated — a topic taken on by a panel led by two top industry analysts.

Though the wireless and mobile sector is heated and saturated, it gives cable a prime opportunity to seek opportunities that are adjacent to their existing businesses for a market that is about 2.5 times larger than the one cable’s serving today.

“To me, it looks like an absolute no-brainer,” Jonathan Chaplin, managing partner at New Street Research, said during the panel discussion.

He said he sees several ways cable MSOs can get into that market, including a WiFi-only approach; a WiFi-and-MVNO play; network sharing deals; building a network from scratch; and acquiring another provider.

Chaplin said WiFi-only is not a product. “My apologies to Cablevision [Systems],” he said, noting that the MSO has been travelling that path with its Freewheel service. “It’s a niche product that goes after a very small part of the opportunity … That’s not exciting.”

And building a network from scratch is too expensive. Cox Communications tried it, at great expense, and eventually threw in the towel. That leaves MVNO-focused strategies and acquisitions and partnerships among the most viable options for some MSOs.

Comcast already has the MVNO option available to it through deals with Sprint and Verizon Communications, and has begun to trigger its arrangement with Verizon, but has not announced what it will do next or when.

Chaplin said Comcast has little to lose here.

“It makes all the sense in the world to start leveraging that MVNO and to start testing the market,” he said, noting that Comcast could, for example, use that to learn more about how to position products, determine if it needs to have a big retail presence and how deeply it would need to subsidize the handsets.

“The economics are attractive enough,” Chaplin said, but warned that the MVNO structure Comcast would have to live with doesn’t give it much control over the product. “That’s not an ideal long-term strategy, either.”

But Comcast could use it as a “stepping stone” for a longer- term approach that gives it more control of the product and the relationship with the customer.

And, because of that, Chaplin said he also thinks it makes sense for Comcast to make a play in the upcoming spectrum auctions. If Comcast comes away with spectrum, particularly with blocks that provide national coverage, it would be in position to broaden its options.

Paul de Sa, vice president and senior analyst at Bernstein Research, held that cable is already a dominant carrier of residential wireless traffic, given its WiFi coverage in and out of homes.

But he also agreed that the cash for wireless is in the cellular/mobile industry, though cable operators can make some scratch here and there by providing non-subs with paid access to their WiFi networks or using WiFi to sell higher-speed broadband tiers. Plus, cable has already established a nice revenue stream with its wireless backhaul business.

While cable has a decent default position (doing nothing new), de Sa said during the panel that he also thinks MSOs must weigh the risks and rewards of entering the cellular mix having missed the growth market, and of jumping into a sector that is dominated by the four major carriers.

“It’s difficult for fringe players to disrupt that [mobile market],” de Sa said, noting that cable would be pressed to enter that arena “without any compelling consumer proposition” given little evidence that a bundle with a wireless component gives much value to the provider. And simply competing on price won’t be enough to move the needle much in what’s now a saturated market.

ON THE FRINGES

He also said that while there aren’t any right or wrong answers yet, aligning with Verizon under an MVNO deal is the obvious path for some operators despite the limitations with respect to product control that presents, as is aligning with a “fringe” player, like Google is doing with T-Mobile and Sprint for its Project Fi hybrid cellular/WiFi offering.

Buying a fringe player and attacking the duopoly of AT&T and Verizon is yet another option, if the price is right.

Any one of those choices is appealing, de Sa said, though “none are overly compelling.”

“Staying neutral,” he added, “is also not a bad option.” In a panel later in the day, Rob Howald, senior vice president at Comcast, toed the company line when asked about the MSO’s intentions with respect to the coming 600-MHz incentive auction.

Comcast, which previously said it will participate in the auctions, is “assessing [its] options carefully in that space,” Howald said, adding that the MSO is still doing its homework on any possible strategies it might go with.

But on a broader level, he said, any focus on cellular by Comcast is to “make sure that existing services are well complemented outside the home,” rather than worrying about some “magic” around a quad play offering that was once under consideration by various cable operators.

SIDEBAR: The Slow Road to 5G

NEW YORK — 5G, an emerging standard that represents a quantum leap over 4G/LTE, promises to enhance current mobile and wireless experiences in many ways.

A big one is a jump in the ability to deliver at least 10 Gigabits per second per cell. 5G will also facilitate the so-called Internet of Things, as well as critical apps and communications services that require super-low latency, such as autonomous, self-driving vehicles and other high forms of robotics.

Technically speaking, that low-latency element will be pushed forward by virtualization techniques that will allow for a more distributed network in which software apps are running at the edge.

5G standards are still being developed, and deployments aren’t expected to be underway until at least 2020.

Though some of those use cases can employ LTE, 5G offers a combination of capabilities that hit them all, Bob Berner, chief technology officer of Rogers Communications, said during a mid-day keynote at the Inform[ed] Wireless conference.

But the big question, he said, is whether there’s enough money in those markets to justify the economics in these high-band frequencies that can work over short ranges.

“Spectrum is the real estate of the mobile business,” Berner said. But the wireline business will also expand — a good sign for cable — because those wireless hubs still need to be connected to high-capacity terrestrial networks.

Berner also said 5G has the potential to play a role in cable operators’ networks, suggesting that a 5G small cell at the edge of the wired network could prevent having to run fiber all the way to the home.

In a follow up panel, Bjorn Ekelund, head of device technology and ecosystem at Ericsson Research, agreed that 5G is being viewed as a potential fiber replacement.

Another new characteristic that 5G will bring is the idea of “network slicing” — the ability to micromanage the network for specific use cases as they arise.

And though 5G standards are not yet cooked, “5G is really happening,” Ekelund insisted, pointing out that Ericsson has 21 field trial agreements in place with carriers.

In the meantime, 4G still has plenty of life left in it and will be complemented by 5G, Timothy Burke, vice president of strategic technology at Liberty Global, said.

Sidebar: Small Cells Equal Big Opportunity

New York — Even if cable operators stay out of the mobile service game to a large degree, they are well positioned to continue to make hay on backhauling them with their hybrid fiber/coax and fiber-only infrastructures, particularly with the increased need for small-cell infrastructures and 5G technologies on the horizon.

Small cells are factoring in as carriers and venues seek out ways to handle big, spikey data loads in concentrated, heavy-traffic areas that aren’t supported well by the macro cellular network.

Crown Castle owns 40,000 tower locations in the U.S. and, as part of a market expansion, now supports about 16,000 small cells, Phil Kelley, the company’s senior vice president of corporate development and strategy, said.

And that demand will increase as mobile moves into 3.5-GHz and 5-GHz spectrum.

“It’s backhaul, power and access,” Jeremy Bye, vice president of carrier and wholesale at Cox Communications, said, noting that the MSO launched a small-cell service last year. “When you have all of those, it really fits well into our business model.”

RELATED:Special Report > Building Pay TV’s Workforce of the Future [subscription required]

Recruiting in the digital age is challenging pay TV operators and programmers as they struggle to fill digital and technology jobs. Two recruiters specializing in the media/entertainment industry – Renee Hauch, EVP of recruiter Carlsen Resources, and Lisa Kaye, president and CEO of online jobs network Greenlightjobs.com -- shared their perspective on that challenge and tips on how pay TV companies can meet it with Multichannel News contributing editor Leslie Jaye Goff. An edited transcript follows.

MCN: What are the high-priority and hard-to-fill jobs in the digital and tech domains?

Lisa Kaye: Engineers, programmers, content developers who can think about new ways of what’s hot, social media marketing people. Every company needs the people who sit behind the scenes in social media, and that didn’t even exist five to eight years ago.

IT people are like accountants – you always need them. Engineers with multiple skill sets – who understand how the content is produced and can hard code – are must-haves.

I think the metrics-driven jobs -- anything in analytics, whether data analytics, programming analytics, research analytics – are very popular now. Any role that focuses on gathering data relative to viewership and usership and ownership, and any data relative to the look-and-feel of what viewers are experiencing is very hot.

Renee Hauch: Whereas analytics used to be separate, now it’s becoming more a part of lots of jobs across different departments, from finance to marketing. Companies want people who can really understand those numbers and turn that data into a new show, a new set of subscribers, a new platform.

So while there has always been a right-brain/left-brain, creative-vs. analytics approach, as the industry changes everyone is looking for people who can figure that out. They want people who have at least a general understanding of how to take information and turn it into revenue, however that may be.

MCN: In what other ways are the types of candidates and skill sets that pay TV companies need evolving?

RH: Initially we saw companies saying, “We are digital, and we only want digital experience.” Now they’re taking a step back and looking for blended skills, like a marketing specialist with knowledge of the linear world, the history of TV and digital experience. It’s happening across, sales, marketing and production; they want people who are on top of TV trends and also knows what’s working and what’s not working in digital. We’re seeing a morphing of the two.

MCN: What’s driving the digital/tech demand?

LK: Millennials are not looking at content on traditional TV anymore; they’re watching on any other device you can think of, so on the MSO side, they’re looking at how the viewer of the future will be watching content, and staying ahead of that. Also, with the onset of 4K and virtual reality – and the companies that are integrating those technologies for the B-to-C market – they’re realizing, “If we don’t get a handle on what that product is going to look like to the consumer, we’ll be behind the 8-ball as a cable provider.”

On the programmer side, networks are looking at, "What are we going to distribute, what are viewers watching and what are the platforms we need to be on?” And, “How do we manage those assets in a way that protects IT and IP and gives viewers what they want?"

RH: We still do linear programming candidate searches, but more and more of the demand is in the digital space, and that has changed how we recruit and how the companies are recruiting.

MCN: How so?

RH: Recruiting is a much bigger sales job because they have to lure people in from outside the industry and they’re competing head-to-head with the digital media companies. Finding candidates requires much more targeted outreach, and vetting them takes a lot more time. And when a prospect is really good, they have multiple companies coming after them, so we’re also seeing a lot more of a sales effort: “Let’s fly out your family, show you around, really give you time to know the company.”

MCN: What motivates the digital and tech pros to accept offers, and measured by that, what should pay TV companies do to be more competitive in the digital/tech jobs market?

RH: Sometimes a candidate’s decision comes down to money, and sometimes it’s the title, or the ability to work from home. The tech companies tend to be more flexible, whereas linear TV companies have tended toward having more set HR policies. Pay TV companies have to be flexible and see what they can give and what they can’t – it can be the scope of the job or money or the environment.

LK: Companies should be evaluating the work environment and work culture as part of the recruiting package, looking at how they are positioning not just the job and its progression, but what is this work environment going to look like when the new hire show up? Do they need an office or can they work remotely? They need to be concerned about the look-and-feel of the company and the culture inside.

I think for candidates it’s really 50% compensation and 50% who I work for and what projects I’m working on. That is equally, if not more, important than compensation for these kinds of candidates. Compensation is important but not the driving force of why they take a job – it’s about the innovation and who am I getting behind that could be the next Steve Jobs?

They go to tech startups for the ride, for the upside. Those are much more palatable drivers than bonuses and benefits. That’s a model that cable needs to get its hands around fairly quickly and, from their current cultural environment, it might not be an easy switch.

RH: I was doing a network EVP of programming search, and an OTT provider was courting the same person for a similar position with the title of “director.” The pay was similar, but the programmer had better long-term incentives. But the candidate chose the OTT provider because the environment had that energy and entrepreneurial culture.

And that’s why sometimes it’s hard to compete against the digital tech companies It comes back to the branding piece and whether it’s a brand people are passionate about.

MCN: The 2015 CTHRA Compensation Surveys show both MSOs and programmers increased salaries for key digital and tech jobs last year, and yet they still lag behind digital and tech companies in total compensation across the org chart. What else can they do to seal the deal with an in-demand candidate?

LK: Pay TV companies are lagging behind in total compensation. The digital companies’ compensation model emphasizes total compensation – including bonuses, equity, etc. – while traditional cable companies are still on an older model of focusing on higher base pay instead of variable compensation. It will be interesting to see if that affects their ability to be aggressive because they’re still in transition.

RH: The digital companies can definitely throw more money at people. Pay TV companies are sensitive to wanting to bring talent on board and make them feel well compensated, but when a new SVP is making $50,000 more a year than another who’s been there longer, that’s a problem.

One scripted programmer we worked with realized they were losing people to higher offers, so they spent for the SVP they wanted but then boosted everyone else’s salary as well, and they’ve had great retention. You have to see the value of your team because when you lose people, it costs so much to replace them.

We used to see five-figure sign-on bonuses. Recently I saw a $100,000 sign-on bonus. One company paid for a candidate to relocate and paid for their temporary housing for a year.

MCN: How do MSOs and programmers rate against each other in terms of recruiting in the digital age?

RH: We do a lot more work with programmers and, in general, the programmers have been a little better at it – the message is a little sexier on the programmer side vs. the operator side. But some of the MSOs are getting more forward-thinking. I think Bright House [Networks] has always been forward-thinking with its recruiting.

MCN: How critical is it for pay TV companies to get ahead of the digital/tech recruiting curve?

LK: There’s a lot to be said for what’s going on today with technology at the forefront, but if there’s no content to support, who cares? That’s what’s important on both the MSO and programmer sides. If the studios and cable ops can’t figure out what content works on emerging platforms, it will force the technology companies to start developing their own content for those platforms, and that would really hurt the industry. So they have to step up their game and race to the finish now.

Authenticated TV everywhere services are driving higher customer satisfaction for pay TV providers and serving as an effective-churn buster, but awareness issues — specifically consumer misconceptions about extra costs — have stymied the multiscreen offerings.

Those are the key findings from Hub Entertainment Research’s annual TVE study, based on a survey of 1,202 U.S. TV viewers with broadband service.

On a positive note, 73% of respondents said TVE drives higher satisfaction, and 84% of frequent TVE users said they plan to stick with their current provider for the next year, vs. 66% of consumers who don’t use the authenticated platform.

Despite that, 53% of users said that not only have they never used TV everywhere, but they weren’t even aware they could access it. And though TVE platforms are part of a monthly subscription, more than half of respondents (54%) assumed there were extra costs.

Click here for more FCC set-top box news.

In direct response to FCC chairman Tom Wheeler's proposal Wednesday to spur traditional and online video access device competition, the newly created Future of TV Coalition said it was unnecessary and would lead to an "endless muddle of unanswered questions."

The coalition, which launched at about the same time the FCC was unveiling the proposal includes the National Cable & Telecommunications Association, American Cable Association and the Motion Picture Association of America.

"This is a solution in search of a problem. Consumers can already access pay-TV programming right alongside streaming content on an ever-expanding universe of consumer-owned devices, from smart TVs, game consoles and streaming devices to laptops, tablets, and smartphones," the coalition said in a statement. "This app-driven innovation is already happening — and it doesn’t require a government mandate that would increase consumer costs, strip viewers of privacy protections, and let third party device makers ignore the terms of carriage agreements between programmers and distributors.

The FCC proposal, as best anyone can understand it, still strips out all the tools that are used to honor license agreements, would increase consumer costs by mandating yet a second box inside the home and thus ignores the trends away from in-home boxes and devices, eliminates security protections, and provides no reassurance on privacy rights. Kicking the can down the road and simply saying that some standards setting body may address these issues, fully or partially, in the future, is hardly a guarantee for consumers, creators and distributors. Rather than moving us to a second box and an endless muddle of unanswered questions, the FCC should be moving all of us towards an app-based future that consumers are embracing.”

The pay TV industry is transforming more rapidly than any other major industry. In an acknowledgement of this shift, 2015 was the first year in which the National Cable & Telecommunication Association renamed its marquee “Cable Show” the “Internet & Television Expo (INTX),” reflecting an evolution in the key players involved in the content ecosystem.

Undoubtedly, one of the biggest cable trends for 2016 will continue to be growth in over-the-top (OTT) services: the number of subscribers, the types of players, and the content available.

Meanwhile, M&A will continue to dominate significant mindshare. The question that many cable executives will ask is: In the face of these broad industry shifts, what are the actions that we can take to stay relevant and drive profitable growth?

1. Combatting OTT
If Orange Is the New Black, then OTT is the new reality for the Internet and television industry. Potentially even more worrisome for the industry, original content creation from these services is on the rise, and content providers may continue to follow in the footsteps of HBO Now and offer their content as standalone services.

Facing this existential threat to its video base, the industry will ramp up its response in 2016. These efforts will fall into two key buckets: improving retention strategies with existing products and services and launching new directly competitive services.

Providers can take many actions to prevent cord-cutting and downgrades. Yet an all-of-the-above approach is not likely to be the best option; executives need to know which specific strategies work best to profitably retain specific customers in the face of this threat. Understanding the most profitable price to charge subscribers upon the expiration of their promotion is a critical factor in moving the needle on customer retention. Getting this aspect right is worth tens of millions of dollars. Similarly, offering unparalleled user experiences through new innovative operating systems (e.g., Comcast's Xfinity X1 Platform, Dish’s Hopper, etc.) can increase usage and prevent customers from leaving. As they continue to innovate with their technology offerings, some cable companies are using small-scale tests of their new operating system features to ensure that they have the intended effect of increasing customer satisfaction and product usage, and not turning away customers.

While it is critical to optimize existing offerings, many MSOs are also considering (or have already launched) their own directly competitive streaming services. We’ve recently seen the introduction of Dish Sling, Verizon Go90, Comcast Stream, and others. There will undoubtedly be more to come in 2016. Launching these services does not come without risk. Will existing customers simply trade down from their more expensive TV bundles? Will new customers now have lower ARPU than they otherwise would have? Ultimately, MSOs need to understand how to go to market with their streaming services in a way that compliments their existing business (e.g., retaining customers who would have otherwise left TV completely).

For MSOs that are launching their streaming services in phased approaches (e.g., Comcast “Stream” initially launched in Boston), it can enable them to refine their offerings as they roll them out. Using test vs. control analytics, they can understand optimal pricing, which customers to target with marketing outreach, and more.

2. A Step Change in Analytic Capabilities
Cable and telecom companies have incredible data that they could use to inform their initiatives, but for years, they have not had analytics that can clearly differentiate between value-add and value-destroying programs. As the volume and variety of their data (and the importance of targeted marketing and retention strategies) increases, some MSOs will begin to move towards analytic strategies that provide more accurate and targeted predictions.

Today, many companies measure the effectiveness of their offers by analyzing how many customers redeemed that offer. The problem? By looking at redemption rate in isolation, it is impossible to know how many of those customers would have redeemed the offer anyway. In 2016, more organizations are likely to start using analytic approaches that enable them to identify the cause-and-effect relationships between their actions and customer behavior.

For companies that have already moved beyond redemption-based analyses and do random-holdout testing, speed and granularity of analytics will be the next natural progression. MSOs will increasingly need to evaluate all of their hundreds or thousands of campaigns, not just a select few. Further, they will need to be able to not just understand the aggregate impact, but fully understand which customers will respond best to each initiative. Today, most don’t have the capabilities to conduct accurate, granular analysis on a large scale, leaving millions of dollars on the table by sending the wrong offers to the wrong groups of customers. Significant advances in software automation will start to enable more organizations to rapidly understand the incremental impact of each of their campaigns and instantaneously apply those learnings to the next outreach.

Further, while MSOs have historically relied on highly trained analysts and statisticians, as more organizations see the potential in their data, they will begin to provide more decision-makers with intuitive analytic platforms that enable them to use data to inform each decision, not just a select few.

3. Quad Play: Figuring Out the Expansion of Offerings
In an environment where customer retention is more critical than ever, the importance of Quad Play is growing. More companies are looking to bundle additional products and services with the traditional Triple Play to increase ARPU and increase customer stickiness. AT&T has broadly expanded their reach with the acquisition of DirecTV. Some MSOs may seek to build or strengthen partnerships to offer their own version of an expansion of offerings. The traditional quad play adds wireless, though other service offerings (e.g. home security) may also be in the running.

However, some companies may be struggling to effectively sell quad play. Verizon CFO Fran Shammo recently noted, “It is very difficult for some reason in the U.S. to sell a quad play.” It’s the classic question of how to provide the right products at the right price to the right customer (and with the right message), but now in a much more complicated environment. As MSOs explore traditional quad plays and other new bundles, they need to quickly determine the right products and the right discounts, how those vary by customers, and what the right interplay is between the acquisition, cross-sell side, and retention sides of their businesses. Further, they need to compare all of those possibilities with the potential price upside of offering those same products a la carte.

The industry is changing quickly – and customer preferences and expectations are changing quickly too. MSOs need to experiment with new ideas so that they can zero in on the right answer as soon as possible.

4. Differentiating With Brick and Mortar
As has recently been true in the retail world, as more sales go online, the optimization of the in-store experience is actually becoming more important. Face-to-face touchpoints are becoming rarer, and so they need to be treated with care to make sure the right effects come from those limited opportunities. The store can still be used to form and expand connections with customers, in addition to differentiating customer service from pure-play online competition. Additionally, as the trend of consolidation between wireless providers and wirelines providers continues, wireline providers may have access to a substantial network of physical locations. The recent AT&T and DirecTV deal gave DirecTV a wide network of stores to potentially leverage, which may cause concern for MSOs that could now face pressure to build a physical presence. For MSOs, experience stores – such as the new “Studio Xfinity” – may serve as great tools for customer acquisition, retention, and cross-sell. By giving customers the chance to test-drive innovative new products, businesses get customers to explore products that they would not otherwise have considered.

However, as with any new initiative, it is difficult to figure out which store investments will pay back. Which increase customer satisfaction? Do customers who interact with associates in the store have higher retention, or would those customers have renewed their contract anyway? As MSOs consider such investments, experimentation will be a critical component to understand how in-store interactions affect behavior across channels (e.g., does a customer who goes through an in-store product demo spend more money on video-on-demand servicestwo months later?).

5. Consumerization of B2B
The B2B telecom market has grown faster than the B2C market over the last five years, according to a McKinsey report. Given the saturation in the consumer market and the potential upside in offering business services, focusing on B2B may be a smart growth strategy. While the upside is strong, some consumer-first organizations have under-invested in developing their B2B sales and marketing capabilities, the resources devoted to optimizing those capabilities, and in some cases their ability to track data and analyze B2B sales.

Recently, we’ve seen companies circling back to reinvest in B2B, and we expect this trend to continue and intensify in 2016. Companies need to develop a more data-driven understanding of what levers are affecting their business clients, and how it varies by type of client. It will be crucial to develop and focus analytic rigor on their business side (particular the high-volume areas of small and medium businesses) that starts to approach the levels they’ve been applying on the consumer side for years. Given the fast pace of the industry, acting on a good answer today may be more valuable than acting on a better answer in a year. Companies can’t afford to wait for their data to be perfect before using it, otherwise they’ll fall behind. As such, as they build out these capabilities, they need to be capabilities that can evolve with the organization: they need to work both in the messy here-and-now, and in the more clean-and-organized future.

In this rapidly transforming industry, the companies that come out as winners will be those that continue to experiment and innovate. Whether launching new brick and mortar stores or new streaming services, it will be critical to rapidly figure out which ideas will truly lead to profitable outcomes. As we ring in the new year, MSOs should plan which innovations they want to test, refine, and roll out in 2016.

Jared Brown is a vice president and Marek Polonski is a senior vice president at Applied Predictive Technologies, an Arlington, Va.-based analytics software firm.

Despite being ignored for years, landline voice service — once the cornerstone of cable’s triple-play bundle — is on the decline, but it’s not quite dead yet.

In fact, a new analysis from Sanford Bernstein telecom analyst Paul de Sa indicates cable can count on that revenue for quite a few more years.

Landline telephony has been almost an after thought in recent years, a service considered to be more of a retention tool than a product that brings in customers, like broadband or even video to an extent.

That is evident in buy-rates: Over the past five years, telephony adds for the four publicly traded operators have lagged broadband additions by a ratio of almost 2 to 1.

“By now, residential wireline voice service should have ceased to be,” de Sa wrote in his report. “There seems to be little reason why any consumer would pay $30 a month or more for a phone line.”

But the data shows a different trend, he noted. According to the National Center for Health Statistics National Health Interview Survey (NHIS), which obtained information from 21,517 households, more than half of the homes surveyed had a landline.

And the trajectory suggests landline service might not disappear for at least another decade or more, according to the data.

Landline voice customers won’t trend to zero at least until 2026, de Sa estimated, adding that he thinks there probably will always be a customer segment that retains a landline for emergencies or because wireless service is spotty.

Pivotal Research Group CEO and senior media & communications analyst Jeff Wlodarczak agreed that landline telephony still has some life left, but added that ARPUs will continue to decline.

“Overall, traditional fixed phone growth is likely to continue to decline but I imagine it will last longer than people think,” Wlodarczak said.

That could have similar implications for pay TV and telephone company digital subscriber line (DSL) service.

According to NHIS, wireless-only homes are generally younger: 71% of respondents aged 25 to 29 didn’t have a landline, compared to 19% of those older than 65.

But they also were less affluent: 67% of renters were wireless-only subscribers, compared to 37.3% of homeowners. Adults in poverty (59.3%) and near poverty (54.4%) were more likely than higher-income adults (45.7%) to live in a household with only wireless phones.

The Sanford Bernstein analyst had three reasons for voice’s slower-than-expected decline:

Inertia: The opportunities to buy residential telecom services are few: Mostly when a new household is formed, due to a change in address or because of unacceptably high levels of frustration with the current provider.

“The answer to the question of why households still have residential voice (or DSL or pay TV) in the face of new alternatives that appear to offer superior value propositions may just be that they’ve had it in the past and there’s no particular reason to change,” he said.

Segmentation: While usage patterns vary differently among households, the behavior of a particular segment is unlikely to be representative of the entire base. The NHIS data shows differences in voice penetration around age, household makeup and income, just as value propositions for slower, cheaper DSL service compared to cable broadband, or pay TV (with traditional or “skinny” bundles) compared to over-the-top video, will probably continue to be appealing to a large population segment.

Pricing and retention strategies: Voice ARPU has declined over the past decade, but that is largely due to segment-specific offers like bundling, instead of mass repricing. According to de Sa, there are ways to keep customers and maintain penetration rates by offering products with different price points (like varied amounts of long-distance minutes for voice, different speeds for broadband and different channel bundles for pay TV) and through discounts or other promotions when subscribers call to disconnect.

“As with mobile, the cost of these retention efforts is generally invisible to investors relying on reported financials, only being revealed in the long term as the offers work through the base,” de Sa wrote. “Metrics such as net adds and churn can therefore be misleading from a value-creation perspective, though they garner attention and drive stock movements around the quarter.”

Telephone Line

Cable telephony customer adds for the four publicly traded cableoperators (Comcast, Time Warner Cable, Charter and Cablevision) have lagged broadband by a nearly two-to-one margin over the past five years. (Figures in thousands)

                                 2010           2011             2012              2013                2014              Total

Telephony Adds. . . . 1,602. . . . 1,022. . . . . . 1,003 . . . . . . . . . 776 . . . . . . . 1,088 . . . . . . 5,410

Broadband Adds . . . 2,064 . . . 1,897. . . . . . 2,039 . . . . . . . . . 1,791 . . . . . . . 2,236. . . . . 10,027

SOURCE: Company reports

NEW YORK — Before Liberty Global’s investor day meeting earlier this month, Multichannel News and Broadcasting & Cable editorial director Mark Robichaux sat down with chairman John Malone to ask him about the state of the cable industry. Later that day, before a crowd of investors and Wall Street analysts, Malone would unveil a set of complex tracking stocks to follow the far-flung tentacles of his media companies here and afar. The conversation digressed, frequently, and in his classic Socratic style, Malone — who spoke more like a business professor than a global media chairman — ended up asking more questions than he answered. Still a big cheerleader for Charter Communications, Malone shared his opinion on buying versus partnering, his dim view about the go-it-alone over-the-top cable network business model, and the beauty of a scalable business serving billions of people in Asia.

MCN:This last quarter seemed to better than most in terms of subscriber retention for cable operators. Do you think it’s sustainable?

John Malone: The industry is doing better. I mean, I don’t have the inside look at anything other than Charter in terms of U.S. cable. But I would say in Charter’s case, absolutely it’s sustainable. They are delivering a value package to consumers.

If you think about it, it’s all-digital, it’s all high-definition on the video side, it’s higher-speed Internet and it’s simple. There’s a package. And the public seems to like that.

If [customers] have to contact the company, the company’s CSRs are here in the U.S.; they are well trained and the services are straightforward. So, if you can make the relationship with the customer painless and give them a lot of value, I think that’s Tom’s [Charter CEO Tom Rutledge] whole approach.

MCN:A lot of those gains for cable seem to be coming from telephone and satellite companies.

JM: I think that it’s just a better service. Very simple: You give the consumer a better service. You should gain share if you’re better than your competitor. There is no mystery to it.

What Tom’s secret, I think is, is demanding simplicity, consistency. And in his view, you give the consumer value. You look at what you’ve got to give them and you try and give them a package that conveys the most value for the least dollars. And that’s what you train your people to deliver.

And if you can do that consistently, you win. Now the big capital commitment that Charter made — people forget about this — was going all-digital. This is not something you can do overnight, it’s not something that will happen in Time Warner [Cable systems that Charter is acquiring] overnight.

But once you get people into that platform to where your program guide can be in the cloud and the quality of your television picture is very consistent and it’s all high-def, you can do everything easier.

MCN:Will cable operators continue to take more share from telco and satellite competitors?

JM: If your network is reliable and your pictures are consistent — it’s Cable Operating 101. And if you do it really well, better than the other guy, you’re going to gain share and you’re going to grow. Now having watched Tom and his team, that’s what they do. It’s not rocket science, it’s discipline.

Incidentally, I saw Chase Carey do exactly that with DirecTV when he went there. It was just blocking and tackling. Let’s get rid of these contract installers. Let’s have our own people, let’s train them well and let’s hold them accountable. The guy who delivers the goods gains share and grows, and I think that it’s just as simple as that.

MCN:Many in the industry are obsessed with “cord-cutters” and over-the-top video delivery. What’s your take?

JM: OTT will continue to grow and succeed and be experimented with. And in some cases, the services will be supplemental to some other package. In some cases and in some households, it’ll be replacement. And the bottom line is connectivity is here to stay, both stationary and mobile. The question really is, who can provide it in the best way?

There are always going to be content aggregators, in my mind, because there’s no one entity that has enough stuff. The public’s not gonna want to have 27 subscription services and 27 different bills. So is the NFL big enough to go stand-alone subscription? Yeah, maybe — maybe. But the distribution curve looks like this. [Draws a big hump in the air with his finger.] Demand — there is a lot of demand right here, that’s the sweet spot, but can you walk away from this revenue and this revenue? Right?

Here, I’m talking about the distribution of demand at various price levels. So I mean when everybody talks how about ESPN would do great as a standalone service, well, they get about 20% reach at $10, or whatever it is, and they wouldn’t have a business. That’s why they don’t unbundle. Now, if you took all the Disney content and you could create an over-the-top with the network … you might be big enough to have something that might reach 70% penetration of households with an affiliate fee that, therefore, could be low enough.

This is what Apple is struggling with right now. Can they find enough stuff — cheap enough but good enough — that they can offer a service that’s better than the cable bundle, right?

MCN:Can they?

JM: Well, I don’t know. The jury is out. But … what they think they bring to the table is a superior consumer interface. And the question is, can they then populate that consumer interface with enough content that they can deliver their own version of cable TV in a sort of an over-the-top way and get enough scale to drive their hardware and their software? In other words, can they bring the TV set into the Apple ecosystem?

Now you could say, “Well if [Comcast chairman and CEO] Brian [Roberts] or Time Warner had said to [Apple CEO] Tim Cook, ‘We would love to endorse and embrace your set-top or device and ecosystem, and we think that adds enough value to our services and to our customers that this can be an industrial product’ — then Tim probably wouldn’t be out trying to put together his own cable service.” But nobody wanted to put an Apple device between their network and the consumer.

MCN:Don’t you think that’s justified? Why bring in a middleman — X1 is doing just fine.

JM: That’s a business decision. See, if I was a little guy, I would say, “Come help me figure this out, ’cause I can’t do it and there’s nobody doing it for me.” Right?

But if you’re Brian, you’ve got 3,000 engineers working on this; you say, “Who the hell needs Apple, we have a better mousetrap and why would we put them into our food chain?”

Now Brian thinks he can do it himself; he’s trying very hard. [Liberty Global CEO] Mike Fries believes he can do it himself.

We’re working, by the way, with Comcast on common technology. Cox makes a decision to use X1. Let’s piggyback on all of this technology investment that Brian is making. Let’s not let Apple in, let’s let Brian in. We trust Brian more …

MCN:It’s the devil you know.

JM: Yeah, it’s the devil we know.

MCN:What’s your vision for Lionsgate? [Liberty Global and Discovery Communications acquired 3.4% stakes in the company earlier this month.]

JM: I’m just a director in Lionsgate. Lionsgate has these great production capabilities in both theatrical and video, television. The idea is, by working together, can we create more value for Lionsgate content by making it more global? From Discovery’s point of view, can Lionsgate help them up the game in scripted with a certain amount of scripted content to essentially improve the quality perception of Discovery programming? Is there a nexus there?

From an LGI [Liberty Global] point of view, can working with Lionsgate help LGI with the equivalent of their X1 VOD service? I mean LGI is on the same page that Brian is. We want to have a massive random-access VOD offering that is just part of our service so that when you sign up for — call it the big bundle — you get everything: TV everywhere, all platforms, all systems, all you can eat, whenever you want it, everywhere you want it. And we think, to a large degree, that will reduce the demand for some of these narrow over-the-top services. Not entirely but, you know …

MCN:What’s your opinion of Lionsgate CEO Jon Feltheimer?

JM: Everybody speaks well of him. I think they are a very good organization. They are an independent production business, and they want to stay independent. If I’m in an area that I don’t know, I always go to people who I think do know. So I call [IAC chairman and longtime media executive Barry] Diller up and I say, “What do you think of these guys?” and he said, “They are absolutely as good as it gets.” So that’s a big endorsement.

MCN:Outside of Comcast and NBCUniversal, not that many people still combine distribution and content. Is there anything to these theories of content is king or distribution is queen or …

JM: It’s whatever works. It is certainly working for Comcast at this point. Steve Burke has done a great job.

MCN:Are you leaning in that direction now, marrying distribution and content?

JM: Well no. I’m just an investor. If Mike [Fries] wanted to go vertical, what he has done is he’s gone out and made a few investments — like this Lionsgate one — testing the water, seeing if there’s a “there” there. He’s a 9.9% shareholder of ITV, for instance. He did All-3 Media with Discovery to start testing the waters, let’s call it. Now he’s got this small stake with me and with [Discovery Communications CEO David Zaslav] and Lionsgate.

This is what I call the very early stages of trying to explore the synergies of working together; not necessarily that you’ve got to own it, but if you understand what they’ve got and what they’re trying to achieve, and you understand what you’ve got and what you’re trying to achieve, maybe somewhere there is a pony in there by working together.

There’s a lot of common interests that you can create value in by working together, not necessarily combining but just understanding other industry perspectives. And you know, if you ask me what I try to do, I try to be a synthesizer of these kinds of things, of trying to understand what fits with what. You’re always trying to say, “Gee, could you create something interesting, unique or more valuable that you could do this over here and this over here?”

And you take shots. I have always had a theory that if a cable company could own a broadcast enterprise in its market, that could be an important synergy for advertising, promotion,to give you access to content that you otherwise wouldn’t have access to.

Does it lead anywhere? I don’t know. We just bought Channel 3 in Ireland, the No. 1 Irish-based TV station. And we’ll see. We bought a 50% interest in a Belgian TV station.

Of course, Discovery went out and bought SBS, which is the No. 1 or the No. 2 broadcaster in Scandinavia. It has really worked well for Discovery. The question is, does it work well for a distributor to do that?

MCN:Do you think there’s more opportunity abroad than there is in the U.S. in terms of broadband and cable?

JM: There is more growth-potential opportunity internationally. It’s not necessarily financially that easy. I mean, some of these markets are very, very tricky. You have political, economic and regulatory issues.

Some of these, like China, remain intriguing but I haven’t met anybody yet that made a lot of money in China and got it out. So hope springs eternal. The Asian markets are still pretty tough. If you get it right, anything divided by 3 billion households makes your cost per household look pretty low.

I mean, this is the secret of Facebook. This is why the Internet entrepreneurs, with global standards and global reach, can go from nothing to huge overnight, ‘cause they’re dealing with another couple of zeros.

So if [Facebook founder and CEO] Mark Zuckerberg has 1 billion average daily users, just think about that. No wonder these guys are seeing their market caps go through the roof. That’s something to understand and emulate and try and copy if you can.

MCN:How do you see the U.S. market consolidating?

JM: You have some free radicals floating around on the content side that you could still see aggregation taking place that would have a lot of synergy. And I mean, some of it’s driven by ego, but most of it’s driven by synergy.

New Orleans — More than any single force shaping the television and broadband industry, technology is driving the biggest change.

Engineers and executives steeped in hardware and software acronyms, domestic and international, picked apart the biggest challenges faced by the industry, spanning mobile, multi-gigabit broadband, the IP video transition and a host of others, at the Society of Cable Telecommunications Engineers Cable-Tec Expo in New Orleans last week.

Waxing Wireless

While U.S. cable operators are leaning heavily on WiFi to lead their wireless strategies, Liberty Global has also been pushing hard on quad-play offerings that tie in the MVNO (mobile virtual network operator) model.

Mobile “is becoming the primary computing device,” Balan Nair, the MSO’s executive vice president and chief technology officer, said during a presentation about technology trends and how the operator is handling new forms of competition.

Liberty Global now has about 4.5 million mobile subscribers through its MVNO relationships (that subscriber number is expected to grow to 8 million through the MSO’s M&A activity). Nair said Long Term Evolution (LTE) allows for seamless connectivity, and the technology is on the road to delivering gigabit capacities.

“LTE is here to stay,” Nair said.

But WiFi “is becoming a bigger and bigger part of our story going forward,” he said, noting that delivering a good WiFi experience in the home matters more to many consumers than the wired broadband pipe connecting the home itself.

Nair also shed some light on Liberty Global’s future plans, telling the crowd the MSO is working on its first “WiFi-first” device, which would prefer WiFi access when it’s available and seamlessly fall back to the LTE mobile network when it’s not.

Enabling that seamless transition “is not an easy thing to do,” Nair allowed, adding that Liberty Global expects to introduce the WiFi-first product toward the fourth quarter of 2016.

During the follow-up panel moderated by Cox Communications president Pat Esser, Nair outlined four ways cable operators can enter the mobile game — they can build and operate the network themselves (if they have spectrum); buy another mobile provider; launch a “lite” MVNO whereby the MSO is relegated as a reseller; or introduce a “full” MVNO play where the operator builds out the mobile “core,” keeps call control and essentially rents access to the radios and base stations.

Liberty Global has tried out all four, and Nair was direct about the issues cable operators face with the home-grown route.

“I’ll tell you, building sucks,” he said. Though Liberty Global was able to obtain spectrum relatively cheaply, the MSO shut down its home-grown network about 18 months after launching it.

He said Liberty Global has found the most success, from an operational and economic standpoint, with the full MVNO approach, which allows the operator to control the SIM card that goes in the smartphone.

“In the end, it’s about handsets and price,” he said, noting that he puts the lite MVNO on the “bottom of the list” because the operator has no control — it’s just about renting and selling.

Nair also talked up the positive effect quad-play bundles have on customer retention.

“Over time, the churn rate is discernable between a quad-play and a non quad-play,” he said. “There’s a downside, though. If you screw up with mobile, you lose all four — you lose the whole quad-play.”

Service Agility, IP Video, Cybersecurity

The technology chiefs jumped to other topics during Wednesday’s conversation, including service agility, customer-centricity, the all-IP progression and cybersecurity.

Comcast, fresh off the national rollout of its voice remote, will launch an add-on called “X1 Answers” in mid-November, MSO executive vice president and CTO Tony Werner said.

“You’ll be able to ask, ‘What was the Broncos score?’ ‘How tall is the Empire State Building?’ I think it’s going to change a lot of things,” he said.

The transition to all-IP is foundational to proactive change, Werner and others said. By this time next year, Comcast will have deployed 8 million pure- IP set-tops, which matters to serving video on second screens.

“We have the same number of baby boomers as millennials right now, and the millennials are watching a lot more content on mobile,” Werner said. “If we have 24 million customer relationships and 15 million video starts in a week [on mobile devices] — that’s exponential, and it will probably only continue to grow. If you don’t have video over IP, you’re going to miss a big part of the audience — and it’s a growing part, not a shrinking part.”

Rolling out more features and services more quickly is a big priority for all network operators, execs said.

Liberty Global, which is deploying only Reference Design Kit-based devices and will begin converting to HEVC (High-Efficiency Video Codec) for 4K/Ultra HD video next year, will get to service agility using defined and publishable APIs (Application Program Interfaces), Nair said.

“I just want to build a stack that has almost every functionality covered by APIs — it’s a big transition for us,” Nair said.

For Nomi Bergman, president of Bright House Networks, the near-term product future includes more 10-Gigabit EPON (Ethernet Passive Optical Network), with an eye toward 100-G EPON. “We’re now helping to create the standard for that,” she said.” Also hot in BHN markets: Its “Echo”-branded whole-home WiFi solution.

“It represents a really nice collaboration between the technology, product and marketing teams,” she said.

On the heels of Tuesday’s Cybersecurity Symposium, Nair described a massive hack in the Netherlands, where 2 million broadband connections were shut down, two nights in a row. The four perpetrators were arrested a couple of weeks ago, and the incident caused Liberty to overhaul its crisis handling mechanisms.

“In dealing with communications, law enforcement, regulatory, PR — as it turned out, what we had wasn’t the most easily translatable during a crisis. We had to rebuild a lot of our processes,” Nair said.

Panelists were also asked to discuss some things they’re working on today. Phil McKinney, president and CEO of CableLabs, said his thinking tends to gravitate to what’s coming tomorrow, noting that his group has been focused on “exponential technologies” — things that are outside the scope of the traditional planning cycle.

He said he worries about “what’s beyond the horizon … so that we don’t get surprised.”

Read more news from SCTE Cable-Tec Expo.

RELATED: Dolans to Drahi: Cash and Carry

With the stroke of his pen, the maverick European telecom mogul Patrick Drahi cemented Altice’s U.S. foothold as the fourth-largest cable operator with a $17.7 billion, all-cash deal to purchase Cablevision Systems, one of cable’s oldest family-owned companies.

The Cablevision deal comes on the heels of Altice’s pending $9.1 billion purchase of Suddenlink Communications, a midsized operator with 1.2 million customers in the Southwest and Midwest. With Cablevision, Drahi’s Altice gets 2.7 million cable customers in the country’s largest market — metropolitan New York City, specifically the Bronx, parts of Brooklyn, Long Island, and parts of New Jersey and Connecticut — and overnight becomes the largest foreign owner of a U.S. cable MSO, with 4 million subscribers.

But Altice’s speedy ascension up the cable ranks — it had no U.S. presence six months ago — brings with it vast uncertainties. And while chairman Patrick Drahi believes he can better run a U.S. cable business by applying European cost disciplines, some analysts believe he will face big challenges.

“Six months ago, we were nonexistent,” Drahi said at the Goldman Sachs Communacopia conference, adding that the new company still has more room to grow.

“This is moving fast, but we’re not in a hurry,” Drahi said. “There are more opportunities to consolidate at these same prices.”

Most analysts agree that Cablevision could be the tip of the iceberg for Altice.

“In our view, clearly Altice is not done with its acquisition strategy, and this could include any telco assets not nailed down,” wrote Pivotal Research CEO and senior media & communications analyst Jeff Wlodarczak.

Critics immediately centered on the deal’s high price — it works out to about 9.5 times cash flow, not including synergies, and 6.1 times with synergies — and what many have said are unrealistic cost-cutting goals. Typical deals are in the range of 7 to 8 times cash flow.

In a blog post, MoffettNathanson principal and senior analyst Craig Moffett said squeezing $900 million in cost synergies from Cablevision could be a chore, especially since Charter Communications has said it will derive about $800 million in cost synergies in its merger with Time Warner Cable, a company about five times larger than Cablevision.

“Cost reductions like those won’t just mean cutting SG&A,” Moffett wrote. “It will mean slashing customer service; repair and maintenance; and sales and marketing (specifically, channel-mix optimization and back-office upgrades). It’s hard not to imagine that that might have at least some impact on market share.”

Altice is one of the most rapidly growing telecom companies in Europe. Based in the Netherlands, it spent about $28 billion on deals in 2014 alone. Altice has about 3.1 million cable customers in France and Israel and more than 20 million wireless customers across Europe.

Altice has managed to squeeze profits out of its businesses with a “slash-and-burn approach,” drastically reducing head count, eliminating what it says are unnecessary costs and aggressively negotiating contracts with suppliers.

Drahi said he also sees savings in electricity costs, by eliminating amplifiers in the network, and in shifting more of the sales function online.

“My model is to bring U.S. ARPU to Europe and the European expense to the U.S.,” Drahi said.

The recipe is simple, Drahi added — control excess costs and the cash flow will take care of itself.

Altice also sees cost-cutting opportunities in employee salaries. CEO Dexter Goei said more than 300 Cablevision employees make $300,000 per year or more.

“I understand that,” Goei said at the conference. “There’s a new sheriff in town. We will probably run things a little differently.”

Still, cost containment wasn’t Cablevision’s only problem. The company has been bleeding subscribers in the past few years after a strong period of growth in the early 2000s. According to Moffett, video subscriber losses in two key areas — the New York boroughs of the Bronx and Brooklyn — have accelerated to 6% and 8% in the past quarter, indicating that Cablevision’s competitive position against Verizon Communications’s FiOS TV is worse than it has been letting on.

Verizon chairman and CEO Lowell McAdam told CNBC’s David Faber last week that he welcomes Altice as a competitor, adding that while Drahi talks tough, he’s heard it before.

“Success in Europe or Asia doesn’t necessarily mean success in the U.S.,” McAdam told CNBC. “Our product, fundamentally, is superior when you have fiber into the home versus any of the DOCSIS products. We welcome them into the market.”

Drahi’s strategy hasn’t quite been solidified yet, but he hinted that higher prices for broadband and more flexible video packaging could be a path. “I think broadband is too cheap,” he said.

In a research note, Moffett said that higher broadband prices may be the only way Altice can offset video losses.

“Verizon’s FiOS brand managers must be licking their chops,” Moffett wrote.

WASHINGTON — Some cable operators and at least one public interest group want broadcasters to prove their market-rate claims when it comes to pricing demands for retransmission of their signals.

Broadcasters should be required to back up pricing with bona fide market data, a group including Mediacom Communications, CenturyLink and Public Knowledge declared in a letter requesting that the Federal Communications Commission look to labor laws and “duty to disclose” obligations to help redefine what constitutes good-faith negotiations.

The letter, sent to Media Bureau chief Bill Lake as the FCC begins its congressionally mandated review of the definition of “good-faith” retransmission- consent negotiations, said the key issue the FCC needs to address is the lack of price transparency in negotiations and that the way to fix that is to require parties to justify their prices by revealing those paid by others in the market.

Given the size of some designated market areas, Mediacom senior vice president Tom Larsen said, that could include satellite companies and large and small cable and phone companies.

“The commission concluded in 2000 that relying on established labor-law precedent governing collective bargaining as a tool for interpreting and applying the good-faith retransmission-consent negotiation requirement was consistent with congressional intent,” they argued, adding the “totality of circumstances” test the FCC is charged to review in the good-faith inquiry comes directly from labor law.

Given that, they said, the FCC should also borrow the concept that negotiating parties have an obligation (“duty to disclose”) to provide evidence substantiating their claims.

The FCC has not required that, but circumstances have changed, and the group wants the FCC to change with them.

“Taking a page from labor law precedent, the commission should require, as part of the totality of the circumstances standard, that the parties negotiating the terms of a retransmission- consent agreement disclose relevant information substantiating and verifying their bargaining claims,” they told Lake.

National Association of Broadcasters spokesman Dennis Wharton dismissed the proposal out of hand. “Another day, another ridiculous Mediacom petition,” he told Multichannel News. “The FCC should ignore this disingenuous suggestion from a company famous for its last-place customer service record.”

Also signing on to the letter were Consolidated Communications, FairPoint Communications, NTCA — The Rural Broadband Association, Public Knowledge, and ITTA, which represents mid-sized telecom providers. (ITTA was inadvertently omitted from the list when this story first published. We regret the oversight).

For the cable industry, FTTP is no longer a four-letter word.

Thanks to increased competition and the emergence of over-the-top video and other bandwidth-gobbling services, fiber-to-the-premises architecture is now an accepted part of the cable industry’s lexicon, albeit still in a limited way.

For more than a decade, cable operators have been well-served by a hybrid fiber-coaxial (HFC) network matched with DOCSIS (Data Over Cable Service Interface Specification) technology, and that combination still dominates the broadband landscape. The top 10 U.S. MSOs accounted for 60% of the residential broadband market, and 86% of all broadband net additions in Q1 of 2015, per Leichtman Research Group.

But fiber-fueled competition is heating up, particularly among incumbent telcos and overbuilders, despite Verizon Communications’s recent sale of wireline assets to Frontier Communications and an apparent de-emphasis on FiOS.

Among the newcomers, Google Fiber is putting a scare into the cable sector as it pushes ahead with expansion into four metro areas — Atlanta; Charlotte, N.C.; Nashville, Tenn.; and Raleigh-Durham, N.C. — building on earlier commitments in Kansas City; Provo, Utah; and Austin, Texas. Google Fiber represents a tiny portion of the market, but has successfully put 1-Gig on the front burner while setting the bar on price at $70 per month for a standalone offering.

Of potential greater concern to MSOs, though, should be what’s afoot at AT&T. As it looks to get approval for its proposed merger with satellite-TV provider DirecTV, telco AT&T disclosed in a recent public-interest fi ling that it has committed to expand its fiber-based GigaPower platform to a total of 11.7 million homes — about 9 million more homes than in its previously announced commitments.

That bigger commitment is “less than meets the eye” because it factors in a broader set of customer locations that include businesses, vacant homes and apartments, Moffett Nathanson principal and senior analyst Craig Moffett said in a recent report. Nonetheless, Moffett also expressed surprise that “[c]able stocks haven’t reacted more strongly to the news.”

“[B]y the simple but closely watched metric of ‘fiber overlap,’ AT&T’s latest announcement is a meaningful change,” Moffett said, outlining assumptions that cable broadband will capture just 40% of share in markets where it faces off with FTTP, versus 55% when pitted against fiber-to-the-node competition and 60% where it’s up against plain-vanilla digital subscriber line (DSL) service.

Among some large MSOs, Comcast has a 32% overlap with AT&T’s U-verse platform, versus Time Warner Cable (26%), Charter Communications (32%), Bright House Networks (25%) and Cox Communications (25%). In the most extreme case, AT&T’s new commitment could translate into a 2.4% decline in cable’s share of the residential broadband market, Moffett said.

And all of this is happening as over-the-top video gains popularity and momentum, fed by the likes of Netflix, Amazon Prime Instant Video, Hulu, Sling TV and CBS All Access, as well as new standalone offerings from HBO and Showtime.

Meanwhile, consumers have been lulled into thinking they need Gigabit speeds ASAP, thanks in large part to Google Fiber, whose cachet and persuasive marketing have fed the perceived need for speed.

“There’s some sort of magic associated with fiber,” John Caezza, president of Arris’s Access Technologies division, said. “Everyone thinks it’s better than [HFC].”

There is still plenty of magic left in the HFC network, MSOs have maintained, but many are starting to use FTTP in a limited, targeted way while also pushing fiber closer to the home elsewhere to punch up their DOCSIS-delivered speeds.

Cox Communications, for example, has been among the most active major U.S. cable operators with “G1GABLAST,” an initiative that will see the MSO begin market- wide deployment of Gigabit services by the end of 2016.

While DOCSIS 3.1, cable’s emerging multi- Gigabit platform for HFC, will factor heavily into that plan, Cox is initially offering speeds of 1-Gigabit per second in select markets using fiber. Cox’s Gigabit deployments currently include targeted FTTP overlays in Omaha, Las Vegas and Phoenix, and FTTP in all of its new-build systems.

GOING ‘PRO’ WITH FIBER

Comcast, the nation’s largest cable operator, is also taking a precision-based approach to FTTP, but potentially at a much larger scale.

Offering 2 Gigabits per second both downstream and upstream, Comcast’s just-launched residential “Gigabit Pro” service is spendy — it carries a limited promotional price of $159 per month (with a three-year commitment), about half of the regular price of $299 per month (with a two-year commitment), plus up to $1,000 in installation and activation fees.

But Gigabit Pro will be made available to about 18 million homes by the end of the year, as homes within one-third of a mile of Comcast’s fiber network will be eligible to get the service.

It’s a success-based approach. Comcast will run fiber and install the necessary equipment, including the Optical Network Terminal, only to customers who sign up for Gigabit Pro.

Comcast is also spinning fiber into some of its coming consumer-facing products. The multi-service Gigabit Gateway that the MSO showed at INTX in May focused on DOCSIS 3.1 and advanced WiFi, but Comcast is developing a version of the device with a direct fiber input as well.

While the vast majority of Comcast’s residential customers don’t need 2 Gbps, the new service ensures that the MSO will have something available to those that do.

“Gigabit Pro is really for those customers who have got extreme needs,” Tony Werner, Comcast’s executive vice president and chief technology officer, said.

Early Gigabit Pro deployments will use the Metro Ethernet system that serves Comcast’s midsized business customers, but “very quickly … we are migrating to the same PON [passive optical network] technology that we’ll be using in some of the greenfield and in some of the other major complexes, like apartment buildings or new developments.”

Comcast hasn’t announced which flavor of PON (GPON or EPON) it will ride long-term, but Werner said the analysis is complete, the decision has been made and the MSO has already issued requests for proposals (RFPs) for Gigabit Pro to vendors.

Cable operators that opt for PON have some new tools at their disposal that will make their new FTTP systems fi t into their legacy operations. CableLabs has already developed DOCSIS Provisioning of EPON (DPoE), specifications that allow cable operators to use DOCSIS-style provisioning for EPON deployments. A version for GPON has also been developed.

Going forward, FTTP will likely be the order of the day for new builds at Comcast, since the bulk of the costs for it are construction and labor.

“Once the trench is open, the incremental economics are close enough that we will do fiber-to-the-prem, unless it’s a very small stub off of existing plant,” Werner said.

Cable’s FTTP projects “tend to be opportunistic; it’s greenfield work,” Phil McKinney, president and CEO of CableLabs, said, noting that cable’s research consortium is staffing up and boosting its work on next-generation fiber technologies.

“If you’re opening up a piece of ground and you’re going to run a conduit in, you’re laying fiber,” McKinney said.

DOCSIS 3.1: CABLE’S WORKHORSE

While cable is using FTTP like a sniper’s bullet to deliver gigabit speeds, DOCSIS 3.1 represents the shotgun blast that will be used to deliver big speeds in “brownfields” served now by HFC.

“I think it [HFC] has tremendous life, and we are going to be riding it all day long,” Werner said, noting that even FTTP is HFC in the sense that fiber is connected to the home, but in most cases, services in those homes are delivered over coax.

DOCSIS 3.1 “is definitely going to be our go-to animal,” he added. “Due to ubiquity, we can go out and virtually serve all of our plant very quickly.”

Comcast and other MSOs are also keen on DOCSIS 3.1 because there’s no service disruption and hardly any friction to the customer.

Comcast is testing DOCSIS 3.1 in the field in anticipation of future deployments. “There’s basically zero surprises on it at this moment,” Werner said, noting that a significant amount of Comcast’s cable-modem termination systems (CMTSs) can be upgraded via software to DOCSIS 3.1 for the downstream, and will require new cards for the upstream.

Broadcom’s DOCSIS 3.1 silicon for modems is “working well,” Werner said, while Intel’s new chip has “just tapped out,” which means it is nearing the final design cycle. STMicroelectronics is also expected to toss its hat into the DOCSIS 3.1 ring.

Adoption of DOCSIS 3.1 will be global and quick, according to a recent IHS study. Asked what share of their residential base would be passed by DOCSIS 3.1-enabled headends or hubs, MSOs responded collectively that it would reach about 35% by 2017.

CableLabs’s latest DOCSIS 3.1 interoperability event was slated to end on July 17, putting vendors one step closer to formal certification and qualification testing this summer. “As we find issues through the interop and through the early devices going through cert wave, we’re going to close that loop pretty tightly,” McKinney said, calling DOCSIS 3.1 “job one for me.”

Though MSOs will deliver Gigabit speeds through a mix of HFC and FTTP, McKinney wonders if the “cable” label is even suitable anymore.

“The cable industry has more fiber in the ground than each fiber provider in the world,” he said. “If you look at total fiber strand miles, there’s more fiber under management and under control of the [cable] operators than anybody else combined.”

Cable operators, on average, still serve about 400 homes from each cable node. “But the trend is absolutely moving down,” Caezza said, noting that some MSOs are skipping the next logical step of 200 homes per node by driving fiber to service groups of 100 to 125 homes per node.

That’s already happening to a degree at Comcast. In some Gigabit Pro markets, the MSO is already in that 100-homesper- node neighborhood, Rob Howald, Comcast’s vice president of network architecture, reportedly said at the recent Gigabit Cities Live! conference in Atlanta.

David Eckard, chief technology officer of Alcatel-Lucent’s Fixed Networks Division, said he sees a “storm coming” in which MSOs upgrade to a distributed architecture (CableLabs recently issued the specifications for several approaches) and consider operationally tricky “mid-splits” that expand the amount of upstream capacity.

“Everybody’s end game, whether you’re a telco or an MSO, is fiber,” Eckard said. “The question [for cable operators] is, how deep is that fiber going to be?”

A Vote for DOCSIS 3.0

Much of cable’s Gigabit fanfare centers on FTTP and the emerging DOCSIS 3.1 platform. But Suddenlink Communications will ride DOCSIS 3.0 as it enters the Gigasphere.

As part of the MSO’s Operation GigaSpeed initiative, Suddenlink is offering a highly asymmetrical service — up to 1 Gigabit per second downstream and 50 Megabits per second upstream — in a handful of markets: Bryan-College Station, Texas; Nixa, Mo.; and Greenville and Rocky Mount, N.C.

According to pricing data for Suddenlink’s system in Bryan, Texas, obtained by Multichannel News, the standalone 1-Gbps service fetches $109 per month, though it’s expected to sell for less when bundled with other services.

Suddenlink confirmed its use of DOCSIS 3.0 technology early on, noting that with “equipment upgrades and channel bonding, we are able to deliver more than 1 Gig to the modem.”

State-of-the-art DOCSIS 3.0 modem chips from suppliers such as Intel and Broadcom can bond up to 32 downstream 6 MHz-wide channels — enough to support downstream bursts of 1.2 Gbps in North American DOCSIS systems.

Suddenlink unveiled Operation GigaSpeed in August 2014, announcing that it intended to raise its top downstream high-speed Internet speed to 1 Gbps in 90% of its footprint by 2017. The initiative encompasses network upgrades, including all-digital migrations that free up valuable bandwidth for things like DOCSIS channel bonding, and the replacement of remaining deployed DOCSIS 2.0 modems with DOCSIS 3.0-based equipment.

Hating your cable provider has almost become a rite of passage in America over the past six decades.

Despite real progress in on-time delivery, trouble-call reductions and improving service quality, cable operators still reside at the bottom of every major customer-satisfaction poll, finishing lower than previous customer-care pariahs such as fast-food restaurants and banks.

“It is almost like you learn to hunt, you learn to fish and then you learn to hate your cable company,” said Temkin Group managing partner and customer experience transformist Bruce Temkin, adding that the hatred isn’t necessarily misplaced. “They earned their position at the bottom. They literally are terrible.”

With consolidation poised to sweep through the cable industry over the next year or so, customer service has again moved into the spotlight, at a time when the cable industry brushes up against the possibility of its first TV-subscriber growth in more than a decade. Comcast, which consistently brings up the rear in customer-satisfaction surveys, ironically has been at the forefront of reversing a 10-year trend in increasing customer losses, reducing basic-subscriber declines by 27% in 2014 and by 75% since 2010.

KEEP THEM HAPPY

Keeping those customers happy and willing to buy even more services is the key to the future.

While customers have heard similar talk before, this time the cable industry is putting money, people and expertise behind what is growing into an industry-wide effort.

Comcast is leading the charge, spending more than $300 million this year and announcing plans to hire 5,500 new customer-service representatives and to build three new, state-of-the-art call centers by 2017. Other companies, such as Charter Communications, Cablevision Systems and Cox Communications, are pushing forward with ongoing initiatives aimed at making the overall customer experience more enjoyable.

It seems as if past moves to improve network reliability, on-time service delivery and increased convenience have laid the groundwork for a radical concept: making customers enjoy interacting with their cable company.

That is not an easy goal to accomplish, and it will probably take at least two years before results are evident. But the industry appears ready for the commitment.

Although the cable business has been through several customer-service changes over the years, what appears to be different is the convergence of technology and the level of commitment from the operators themselves, National Cable & Telecommunications Association senior vice president of communications and public affairs Rob Stoddard said.

“One thing that has come to the fore in recent years is the use of technology as our friend, the ability to more finely tune automated systems, the ability to provide customers more channels by which they can reach companies and customer care staff and personnel,” Stoddard said. “We have, in some cases, been successful in using social media as a boon, rather than a spoiler.

“I think the Comcast commitment is significant,” he added. “Whenever a leader takes a strong position on something, virtually everyone else is going to sit up and take notice.”

Comcast’s participation and its overall commitment to the effort will be key.

According to Temkin, what has derailed past customer-service improvement efforts has been the unwillingness of major operators to not only change the way they treat customers, but to change their internal cultures as well.

“It requires more than hiring a bunch of people or bringing in someone to try and focus on it,” Temkin said. “It really does require a strong push from senior executives to take a stand and change the culture of their companies.”

Despite cable’s past track record, reversing its poor customer-care reputation isn’t impossible, Temkin said.

“Look at where banking was 10 or 12 years ago,” he said. “People hated their banks. Now if you look at the ratings, banks are right in the middle.”

Competition is what forced the banks to look at their industry and their customers in a different way, Temkin said. Though consolidation usually has the opposite effect on customer satisfaction, he said — taking away competition could allow some companies to get lazier on the service front — footprint expansion could force companies to rethink their approach to customers.

“As they get bigger and have a larger footprint, they have to worry about selling more into their existing customer base as opposed to acquiring new customers,” Temkin said. “Look at the alternatives to those guys — Amazon Prime, Netflix and Hulu are putting pressure on them as far as some of their service models. But it will take one of those cable companies to say, ‘We’re committed, we’re going to treat our customers better than how we treat our prospects.’

“Changing attitudes and the way a company makes its core decisions is more important. All it will take is one of the cable providers to make a substantive change and that will change the overall dynamic of the industry.”

Comcast, fresh off the termination of its $67 billion merger with Time Warner Cable, unveiled its customer care plans in May, including the hiring initiative, plans to open three new fully-equipped customer-care centers in Seattle, Albuquerque, N.M., and Tucson, Ariz.; and a series of high-tech, customer-friendly retail stores complete with virtual-reality games and snacks for kids.

It’s a big change from just a few years ago, when operators were heavily promoting on-time guarantees and one-hour appointment windows. Those things are still essential to the overall process, but now the message seems to be more universal.

‘NOT THROWING BODIES AT IT’

Newly appointed Comcast executive vice president of the customer experience Charlie Herrin, who took the job in September after spending several years in product development — most recently as the architect of the much-lauded X1 operating platform — said there is much more to Comcast’s customer-care commitment than dollars and cents.

“It would be a huge mistake to just think that we are throwing bodies at this. That’s not what we are doing,” Herrin said, adding that Comcast is implementing measures in all aspects of the business that are “rooted in the customer lens.”

That includes finding ways to simplify how customers do business with Comcast.

“We’re focused on service levels, for sure; focused on the quality of those interactions. But we’re equally focused on, can we simplify the way that we bill, so we’re launching a trial to do that. We’re looking at our activation process, how do we make that much more clean. We’re looking at taking friction out of the business.”

Herrin said Comcast has also implemented different ways of measuring its service function — like focusing more on net promoter scores instead of internal efficiency metrics — so that it looks at the business from more of a customer perspective.

That approach includes implementing technology such as the Tech Tracker app, which in Uber-like fashion shows where a service technician is at any time before a scheduled appointment, determines when the tech is likely to show up at the door and displays the tech’s name and photo for the customer. If the tech is late, the customer will automatically get a $20 credit to his or her bill. A customer can also rate the tech’s performance via the app immediately after he or she leaves the house, and any rating of less than four stars will receive a follow-up call from a service rep to determine how the customer could be better satisfied.

That focus on the overall experience is something that has been sweeping the industry for the past few years. At Cox Communications, senior vice president Paul Cronin said that the goal isn’t just to be on time or to do the job right — that should be a no-brainer — but to make sure that customers have a good feeling about their interactions with the company as a whole.

Cronin calls it a “holistic” approach.

“Historically, I think our industry and our company have looked at customer service along very specific customer touchpoints, be that our care organization, field-service organization or our retail point; places where we physically interact and touch with customers,” Cronin said.

“Over the last several years, what we’re looking at is more of the end-to-end customer relationship that starts with the brand message in the marketplace, how they interact with our products and services and what value they see in our products and services.”

COX’S RECENT EXPERIENCE

But even Cox Communications, which has been considered the gold standard in cable customer service, has begun to see its ratings slip. In the past three years, Cox’s American Consumer Satisfaction Index (ACSI) ratings have slipped from 65 in 2013 to 62 in 2015. The company that had consistently been the leader among cable operators fell to third place, behind Bright House Networks and Charter Communications, in 2015.

Cronin said Cox’s internal customer-care research shows that satisfaction is improving. He said measurement metrics don’t reflect the overall holistic care approach that many operators are taking.

“Customers are seeing value,” Cronin said. “We’re introducing products and services, new technologies, new ways to interact with us. I’m not sure all of the measurement systems out there necessarily reflect that holistic view of what customers are asking for and, frankly, what we’re delivering.”

Aside from traditional ways for customers to interact with the company, Cox and other cable operators are putting more emphasis on contact points, including Web interactions, social-media exchanges and chats.

“These are all channels that aren’t brand new but are clearly becoming more important and evolving,” Cronin said. “Regardless of the channel you want to do business with us in, we’re meeting your needs and exceeding your needs. We’re moving beyond the traditional call centers.”

Traditional metrics are also showing that some cable operators have been making strides in improving the customer experience.

Cablevision Systems launched a track-the-tech app in 2013 and has been a pioneer in self-installation of services all which have led to strong results.

Over the past nine quarters, Cablevision said, service calls are down 21%, trouble call-related truck rolls are down 32%, repeat trouble calls are down 46% and about 88% of outages are identified before a customer reaches out.

Cablevision also has been actively using social media — it had a Twitter account (@OptimumHelp) since 2012 that has about 11,000 followers and has trained social-media agents that specialize in customer support, account information, product information, sales and others.

Other cable operators have followed suit. Cox has a strong social-media presence and Comcast expects to hire 60 people in its social-media unit by late spring or early summer. Since launching its social-media efforts in 2010, Time Warner Cable has grown that team from just three people to about 25 today.

Herrin said the focus of social media is shifting, in that it isn’t being used solely as a way to inform customers of outages after the fact, but more as an engagement tool.

“I think we’re also using it as a valid care channel,” Herrin said. Like any other marketing tool, social media also can be used to make sure that customers are aware of the total customer-care plan, he said.

“It’s something we want to make sure we leverage. Let’s face it, a lot of people would prefer to consume news and information that way,” Herrin said. “We have to make sure we’re using that channel to let people know the plan and the journey that we’re on.”

DAMAGING ANECDOTES

Still, cable has a long way to go to right the customer-care ship. It has endured several black eyes over the years, especially at Comcast.

As the largest cable company in the country, with about 22 million video subscribers, Comcast has been an easy target of ire. It has brought up the rear in several customer satisfaction surveys: J.D. Power, the ACSI and Temkin Group all have ranked the cable giant near the bottom in each of their TV service surveys for the past two years.

In 2015, Comcast received its lowest ACSI rating since 2008 — a 54 — and its only consolation was that Time Warner Cable was slightly worse, with an ACSI rating of 51. That TWC ranking, by the way, was the lowest mark among 300 companies in the ACSI Index.

The low ratings ironically come as video-subscriber metrics have been at their best levels in years. In the first quarter of 2015, Time Warner Cable reported a gain of 30,000 video customers, the first time it crossed into positive video-subscriber increase territory since 2006. Comcast reported a gain of 6,000 basic video subs in Q4 2014 and has reduced its basic-video losses by 75% since 2010.

At Charter, which had a gain of 3,000 basic-video customers in the fourth quarter of 2014, losses have declined by about 92% since 2010. Even Time Warner Cable, which saw basic video losses balloon to 833,000 in 2013 — the aftermath of its month-long CBS blackout — cut those losses in half in 2014 to 408,000.

Though there seems to be a disconnect between the satisfaction ratings and better subscriber metrics, Temkin said, the disparity isn’t uncommon. He characterizes those customers as “trapped.”

“The trapped are customers who are dissatisfied with how they are being treated, but are still remaining loyal and staying with their current provider,” Temkin said. “I would bet that that industry has more trapped customers than any other industry. There is an opportunity for someone who comes out with something that is noticeably and significantly better to grab a lot of those customers.”

Efforts to increase the number of customer-service representatives and build new call centers are all well and good, in Temkin’s view, but they miss the true mark. Cable, he said, could go a long way toward righting its past customer-service wrongs simply by treating its existing customers better.

Comcast has been the butt of jokes and the focus of two of the most high-profile customer service disasters in the past two years — the eight-minute haranguing a customer who simply wanted to disconnect service got from a retention specialist and the “A**hole Brown” incident, for the name a Comcast customer-service rep placed on a customer’s bill after that subscriber attempted to reduce his service. In both instances, Comcast immediately rectified the situation — apologizing personally to the former customer trying to cancel service and, in the case of Mr. Brown, offering two free years of service, refunding him for his previous two years and correcting his name in the system, according to reports.

Granted, these are two incidents in a company that receives more than 20 million customer service calls a month. But in the age of instant communication on the Internet and via various social media, any bruise can quickly turn into a hemorrhage with the click of a mouse.

“It is true that, in past years, something that might have been a small blemish in a local market takes on national stature, because it can be spread so quickly through the communications tools at our disposal today. What used to be a small blink in a local market can now spread nationally,’ ” Stoddard said. “That’s not to make excuses for the state of our customer experience. Virtually every customer-care professional that I talk with in the business acknowledges that we are nowhere near where we need to be.”

CABLE-CENTER EFFORTS

Stoddard said operators aren’t alone in their quest to revamp customer care. The Cable Center has several programs available — its C5 program (Cable Center Customer Care Committee) has become more intensive in terms of sharing best practices between companies and turning more frequently to expertise outside the cable business for new ideas in the customer-care space.

Cable Center senior vice president academic and industry outreach Jana Henthorn, who runs C5 with University of Denver professor Dr. Charles Patti, said the program was started about seven years ago and brings cable professionals face to face with customer- care experts from companies like Charles Schwab, Scotiabank and others about twice per year.

“Dr. Patti talks about the functionality of customer experience, things like having the best features, the highest broadband speeds, having the best services and the best price; those are what I would call the head issues,” Henthorn said. “Then there are the heart issues, the emotional things — your customers want to know that you know who they are, that you value them and that you listen to them. I think that now cable companies are now working in both areas.”

Herrin is well aware of the power of the Internet to turn customer care stories viral. And he also is cognizant that it only takes one bad experience to unravel a lifetime of goodwill.

“Any one point of failure can be very damaging for us, that is why we’re so focused on looking at every aspect of the business, of not being content that good enough is good enough,” Herrin said. Safeguards are in place to ensure the quality of customer interactions, he added, but one of the most effective tools in making sure that such incidents don’t happen again is to give more control to the customer.

“Part of our plan is, how do we put more and more of that control in their hands so that it is more convenient and quicker to do?” Herrin said.

CUTTING OUT TRANSACTIONS

Charter CEO Tom Rutledge has said that the key to improvement for the industry is removing transactions out of the business.

According to Rutledge, that means reducing the interactions between customers and Charter service employees.

“The inherent problem in all of cable, and always has been, is that you have to schedule a job with a person who doesn’t really want you to come to their house,” Rutledge said at a recent industry conference. “And you have to do work of an indeterminate length of time and get to the next job on time. And that’s inherently difficult.

“And all businesses that do it — plumbers, contractors — everybody can’t stand them, because it’s a difficult transaction to manage. So the more you can take that out of the business, the higher the satisfaction goes, just inherently.”

Temkin said putting more control in customer hands could be a huge benefit in improving subscriber satisfaction, but it has to include more than just letting customers sign up for service online.

Temkin said one of the biggest factors in the turnaround in the banking industry was the advent of online banking. But the added convenience also required the industry to place a massive support network behind the service, something the cable industry has to be willing to commit to as well.

“You have to help customers learn how to do stuff,” Temkin said. “You have to make it easier, you have to support them and if they have questions, you have to be there for them. They didn’t just put it out there and say, ‘Now, instead of calling us up or going to your branch, go online and do this stuff.’ ”

Five Ways to Improve the Customer Experience

Making cable customers feel good about doing business with their cable company is job one at most cable operators today. Here’s what some are saying is the quickest path to getting there:

1. Treat your existing customers as well as your prospects. Temkin Group managing partner and customer-experience transformist Bruce Temkin said cable’s biggest drawback is that loyal customers feel forgo_ en. While promotions like free months of service and $300 gift cards are saved for potential new customers, the people that drive the bottom line get nothing — save for the occasional upsell call. Temkin said recognizing customer loyalty can be relatively cheap — sometimes a free month of HBO will do the trick — and will go a long way towards extending the life of that customer.

2. Engage customers through social media. While Facebook and Twitter are great tools for informing customers about outages and other potential problems, they can also be valuable in keeping the customer conversation ongoing, finding out what subscribers want and determining how the service provider can make the overall experience more enjoyable, as well as notifying customers of special events and upcoming programming.

3. Make the customer experience an integral part of corporate culture. It’s not enough to just pay lip service to customer care or make sure that the network is reliable, appointments are kept and service outages are at a minimum — people already expect you to do that. Customer care has to become part of overall decision-making, not just selling more products and acquiring new customers.

4. Put more control in the customer’s hands. The best service problem is one customers can solve quickly and efficiently by themselves. More cable companies are using technology and apps to help customers self-install, troubleshoot and solve their own problems and for CSRs to reconfigure or add services remotely.

5. When there is a problem that requires a truck roll, make the experience as enjoyable as possible. That doesn’t just mean being there on time and not tracking mud through the customer’s home. Many operators are using technology like Comcast’s Tech Tracker, a mobile app that lets customers know when, where and who a tech is prior to their appointment. In addition, more operators are letting customers rate their experience almost immediately after it happens — and at some, anything less than a four-star rating prompts a call to see how the company can make the experience better. Comcast also issues an automatic $20 credit to a customer’s account if the technician doesn’t arrive on time.

— Mike Farrell

Among 262 companies whose websites were evaluated by 10,000 consumers, six cable MSOs were among the lowest-scoring organizations on the list.

The "2015 Web Experience Ratings," conducted by the Temkin Group, a customer experience research and consulting firm, examines consumers' likelihood to forgive companies for a poor experience at their websites. The Waban, Mass.-based firm included nearly 300 companies across 20 industries, including pay TV service and Internet service.

Overwhelmingly, consumers indicated they were unlikely to forgive Time Warner Cable, Comcast and CenturyLink (all three tied at #252 of the 262 firms) and Frontier (dead last at #262) for lackluster website experiences in the Internet service category; and TWC (#256), Comcast (#258), Charter Communications (#260) and Cox Communications (#261) in the pay TV service category.

Additionally, Cox was one of the companies that fell the most in the annual ranking from last year, Temkin Group noted, with only 29% of respondents saying they could forgive the MSO for a poor online experience. The two categories earned "very weak" ratings across the board while banks and credit card issuers generally had "strong" ratings.

"It's ironic that many of the cable companies that provide Internet service earned such poor ratings," Bruce Temkin, managing partner of Temkin Group, said.

The top spot went to USAA for its banking business (it was also ranked at #3 for its credit card business and #13 for its insurance business), while Amazon took second place for its retail business (as well as fourth place in the computers category). Temkin Group said the two companies had traded the No. 1 and No. 2 spots for the five years it has been conducting the study.

Congress continues to weigh in on the Federal Communications Commission's proposal to presume cable operators are subject to competition absent a showing to the contrary. Currently, the presumption is that a local market is not competitive.

A finding of effective competition by the FCC relieves operators of local basic-cable rate regulation.

The latest salvos came from both sides of the aisle and the issue as the FCC is expected any day now to circulate an order on the proposal.

In a letter dated Wednesday (May 13), Rep. Anna Eshoo (D-Calif.), ranking member of the House Energy & Commerce Committee's Communication Subcommittee, joined with Rep. Steve Scalise (R-La.) to support the FCC's proposal to "update" the effective competition provision.

They pointed to legacy regulation as an impediment to enhanced flexibility and choice -- the presumption comes from the1992 Cable Act, which dates from a time when cable ops had a 95% MVPD market share, which is now down to a tad more than 50%.

Eshoo and Scalist also cited the time-consuming and costly requirement of the effective-competition provision and said it makes cable ops engage in long and costly proceedings to offer more flexible packaging options to consumers.

They also said saving FCC resources would be saving taxpayer dollars.

On the other side, Rep. Frank Pallone (D-N.J.), ranking member of the House Energy & Commerce Committee, in a letter also dated May 13, asked FCC chairman Tom Wheeler to think hard about the impact of reversing the presumption, pointing to a New Jersey franchising authority's concerns and the impact of the move on consumers.

Pallone said the FCC could simply streamline the petition process and leave the larger question about reversing the presumption for another day, basically inviting Wheeler to punt on the proposed reversal.

The FCC is under an early June congressional deadline to produce an order streamlining the process for smaller cable operators. It was that order the chairman proposed to use to streamline it for all operators by reversing the presumption.

After more than a year of anticipation, the long-awaited consolidation frenzy expected to envelop the cable market may have to wait yet again.

With Comcast’s decision to abandon its $67 billion purchase of Time Warner Cable, all eyes are now focused on Charter Communications, the Stamford, Conn.-based cable operator that started this whole thing nearly two years ago when it initiated a full-bore pursuit of the second largest cable operator in the country.

Most analysts expect Charter to make another run at TWC — company CEO Tom Rutledge has said that he would pursue Time Warner Cable in the event the Comcast deal was not approved — but when and for how much is largely undetermined.

Instead of such a merger accelerating more deal volume, it could have the opposite effect in the industry. Other smaller operators that have been waiting on the sidelines for the Comcast-TWC deal to clear now may have to wait even longer, as Charter mulls its offer for TWC.

In a research note, Needham & Co. analyst Laura Martin said she expected Charter to make a bid for TWC within the next three months. Late Friday, sources confirmed reports that Charter had already started early stage talks with TWC.

Telsey Advisory Group media analyst Tom Eagan said he believes there will still be deals, but that they will be smaller than previously anticipated.

TWC EYEING BRIGHT HOUSE?

The first one he expects to see daylight is a Time Warner Cable purchase of Bright House Networks. Bright House had agreed to be bought by Charter for $10.4 billion last month, but only on the condition that the Comcast-TWC deal was consummated. TWC already has a relationship with Bright House — TWC has the right of first offer to any bid for Bright House, which also has access to TWC’s programming discounts — and buying it could be a defensive move against a potential Charter bid.

“That’s why they have to move quickly,” Eagan said of a possible Bright House deal.

Time Warner Cable says it’s ready to take on the challenge as an independent company, and is leaving the deal speculation to others. In an interview, chairman and CEO Rob Marcus said New York-based Time Warner Cable was not blindsided by the decision to cancel the merger.

“From the day we announced the merger, we continued to execute our operating plan, initially with the intent to deliver a great company to Comcast, but also for the possibility it wouldn’t go through the regulatory process,” Marcus said. “Because we planned accordingly, we come out of this thing very well-positioned for the future.”

The decision to scuttle the deal came down quickly. Reports first surfaced on April 17 that the Department of Justice was leaning toward opposing the merger and, a week later, the termination was announced. At the same time, the Federal Communications Commission was ready to move the merger before an administrative law judge, a signal that it did not believe the deal was in the public interest.

TOO BIG IN BROADBAND

With roughly 60% of the broadband market (speeds of 25 Mbps or higher), a combined Comcast-TWC would just be too big. “We thought we could get the deal approved, we thought we could make a good case,” Comcast chairman and CEO Brian Roberts said in an interview with CNBC. “I think our team did. But in the end, we have to move on.”

But unlike past megadeals that were squashed because of video subscriber dominance, broadband and online video influence is the new lay of the land.

“Today, an online video market is emerging that offers new business models and greater consumer choice,” FCC chairman Tom Wheeler said in a statement. “The proposed merger would have posed an unacceptable risk to competition and innovation, including to the ability of online video providers to reach and serve consumers.”

Whether the FCC’s current stance will have any bearing on future Comcast deals — is the company too big to do anything? — remains to be seen, but Eagan believes Comcast could turn its sites to wireless assets or beef up its programming holdings by acquiring content production companies.

“I think the issue here was broadband,” Eagan said. Meanwhile, at Charter, Rutledge said that in the wake of the termination, the MSO’s business prospects to create new customers remain unchanged. “We will continue to drive growth through innovation in our current footprint and we will continue to evaluate investment opportunities that arise through scale,” Rutledge said in a statement.

And Time Warner Cable is prepared to move forward on its own. It unveiled its three-year turnaround plan in January 2014 — with targets of adding 500,000 broadband customers in 18 months and doubling business services revenue to $5 billion by 2018 — and it has already shown some strong results. Fourth-quarter revenue was up 3.8%, cash flow grew 5.6%, and the operator lost about 38,000 basic video customers for its best fourth-quarter subscriber showing in seven years.

“We are, without a doubt, stronger than we’ve been in many years,” Marcus said. “The business services operation has been hot for many years, it really has been a huge driver of growth for us — I continue to be confident in our ability to hit that $5 billion annual revenue bogey that we’ve talked about. Most significantly, we’ve seen a marked improvement in the health of our residential business. 2013 was admittedly a tough year for us, but during that year we were investing in foundational elements of the business that we knew would put us in good stead down the road. In 2014, those seeds started to bear fruit.”

Marcus added that with first-quarter results scheduled to be released on April 30, he couldn’t be too specific on, but, “Suffice it to say we’ve got good operating momentum,” Marcus said. “We are much stronger than we were as we sat here a year ago.”

Eagan agreed.

“The fundamentals have been dramatically better than they were a year and a half ago,” Eagan said. “And they kept the capex spending. Everyone thought, ‘Why spend the money?’ But he was right to spend the money. Now their plant is better positioned than it was before.”

Eagan said he believes Marcus wants the opportunity to prove he can take Time Warner Cable to the next level. “It was a rough start when he became CEO after Glenn,” Eagan said, referring to TWC’s late chairman and CEO Glenn Britt. “I think he wants to prove himself, and he’s had a year to reflect on that.”

Marcus didn’t rule out Time Warner Cable being involved in M&A, but stressed that the company remains focused on the business at hand.

“We’ve talked a lot about the potential value of scale, but those benefits in a vacuum don’t necessarily carry the day,” Marcus said. “What I’ve talked about repeatedly is our duty is to maximize shareholder value. From our perspective that could be either as an acquirer, it could be as a seller. We’re focused on the things we can control, which is running our business.”

For employees who had been readying themselves for a transition after the deal was completed — several have retired or moved to other companies, with others referring to the past 14 months as “senior year” — Marcus said the focus always has been on running the business.

“I don’t want to trivialize the challenge that has been presented on the people front, but our team has risen to the occasion,” Marcus said. “They have performed more than admirably, beyond our wildest expectations.”

Marcus added that prior to the February 2014 announcement of the Comcast deal, Time Warner Cable had revamped its management team, adding cable veteran Dinni Jain as chief operating officer, former AOL chief financial officer Artie Minson as CFO and former Cox Business executive Phil Meeks to head up its business services unit.

“On one level, all of these guys, and frankly our entire senior management team, have been champing at the bit to show what we could do if we were left to our own devices,” Marcus said. “In a sense there is a lot of excitement about the opportunity before us.” Marcus said personally, he is as pumped as he has ever been

“Who wouldn’t be gung ho about being CEO of TWC?” Marcus said. “As I sit here today, I’m as gung ho as I’ve ever been.”

Cable operators are working on their social skills.

Comcast is the latest MSO to overhaul its social-media efforts to win over customers, with plans to triple the number of employees dedicated to its social-media team.

The goal: help customers solve problems and air grievances via their Facebook, Twitter and other social media accounts.

Comcast said it plans to have about 60 employees fully dedicated to the social media customer-care function by late spring or early summer. That will enable the Philadelphia-based operator to support customers across more platforms and to get to them faster. Comcast hopes to reach that staffing goal by late spring or early summer and will continue to support social media like Facebook, Twitter and Google Plus, expanding to other platforms as the unit expands.

WORKING TO IMPROVE IMAGE

“When we first launched our social-care team in 2007, the idea of engaging with customers on social media was brand new,” senior vice president of customer service Tom Karinshak said in a blog post announcing the plan. “Today the world looks completely different.”

Consistently placing at the bottom of customer-satisfaction reports from J.D. Power and others over the years, cable has tried various ways to improve perception of its service.

They include winnowing service appointment windows to as little as one hour and using online and automated methods to solve service issues and outages.

Social media also has evolved from being a last-resort method to solving service problems to being the first place customers go when they have an issue, according to several operators. That and the instantaneous nature of social media seem tailor-made for cable’s customer-care efforts, offering customers the opportunity to voice their complaints in real-time and giving operators another avenue to solve problems quickly.

Other cable operators have used social media to encourage customers to report service outages and other issues through Facebook accounts and Twitter.

Cablevision Systems has had a Twitter account — @OptimumHelp — since 2012 that has about 11,000 followers and has trained social-media agents that specialize in customer support, account information, product information, sales and others.

At Time Warner Cable — which hopes to merge with Comcast if the federal government approves — social media has been a large part of the customer-service function.

TWC said it has grown its social-media team from to 25 since launching the unit in 2010 with three on the staff.

Cox Communications, Suddenlink Communications and Mediacom Communications also have embraced social media as a way to provide quick solutions to service issues, identify potential trouble spots in the network and bolster good will.

Charter Communications, which does have a Twitter and Facebook presence, has focused its social media efforts mainly on promoting shows and events. In December 2012, Charter laid off the bulk of its social media team when it shuttered its Umatter2Charter social-media care unit. Asked to comment for this story, Charter said in a statement: “Social media is an important component of our marketing and customer service strategy. Charter continues to invest in social listening and uses various social media as a means to engage with our customers, respond to our communities with timely information and provide helpful hints that will keep customers more informed about their service, answers to frequently asked questions, and solutions for common problems.”

Suddenlink has used social media as part of customer care since 2006 and has several people dedicated to the function. Suddenlink has about 1.4 million customers in nine states.

“Like Comcast and others, we recognize the growing importance of helping customers in the social space,” Suddenlink said in a statement, adding that customer activity was initially focused on forums and blogs but has shifted to Facebook and Twitter. “We’ve adjusted our focus accordingly.”

Mediacom Communications has about nine employees dedicated to the socialmedia function, which given its size (about 1 million video customers) is a better ratio than most MSOs.

Senior vice president of customer service and financial operations Tapan Dandnaik said social media can be a valuable tool in engaging customers with the company and its products as well as determining service problems.

MEDIACOM GETS PROACTIVE

Mediacom vice president of customer service Jon Coscia, who manages the social-media team, said the company seeks out negative reviews and reaches out to customers who report problems via social media and forums like DSLReports .

“Sometimes they will alert us of technical issues that are going on underneath the covers,” Coscia said of sites like DSLReports. “It’s a highly technical group and we’ll get good balanced feedback on how certain issues are being received by the technical community.”

Comcast said its social media care team has access to the same tools as call-center agents — they have a direct line into tech teams so they can schedule appointments. The cable company also will add analysts to monitor activity on social media to identify broader potential service issues. Comcast also has set a goal to respond to social media requests within 30 minutes, no small task when you consider Comcast has about 22 million customers.

“We are going to continue to grow social care as much as it takes to make it a real, vibrant way for customers to get their questions answered and issues resolved,” Karinshak said in the blog post. “We’re just beginning the hiring process now and it’s going to take some time to get up and running, but we are really excited about the possibilities.”

Social Graces

Cable operators are beefing up their social-media presence in an effort to enhance the customer service experience. Here’s a look at the efforts of one —
Time Warner Cable.

► Launched Social Media Team in 2010; expanded from three representatives to 25.

► TWC’s Social Media Team opens 12,000 customer cases per month on average, in addition to moderating its peerto-peer community forums; responds to 50,000 posts per month on average and, overall, reviews 200,000 mentions of TWC per month.

► TWC responds to most posts via social within 60 minutes.

► Operates primarily on Facebook and Twitter, the TWC Community forums and third-party forums.   

Rather than focus on the so-called “skinny bundle” and attempt to undercut traditional pay TV provider pricing, Sony is targeting a coveted, much larger demographic with a heavier offering that will weave in several bells and whistles, including a fancy cloud-based interface and a massive cloud DVR.

The no-contract service, called PlayStation Vue, launched last Wednesday (March 18) in three markets — Philadelphia, New York and Chicago. It’s starting off with three tiers that deliver a mix of at least 85 broadcast and cable channels per market: an entry-level “Access” tier for $49.99 per month that includes the broadcast feeds of CBS, Fox, NBC, Cozi TV, MyNetwork, Exitos and Telemundo; a “Core” service that factors in regional sports channels for $59.99 per month; and an “Elite” service for $69.99 per month that includes all of Access and Core, plus more than two dozen additional lifestyle, music and family-themed channels. Subscribers still need broadband to get PS Vue in the door.

While Sony was able to lock in deals with AMC Networks and Turner in time for the launch, still missing in action are ESPN and ABC, as well as premium channels HBO, Starz, Showtime and Epix.

Sony is in distribution talks with Disney and several other programmers, Dwayne Benefield, vice president and head of PS Vue, said in a briefing in New York. He said Sony expects to launch the service to more markets later this year.

While Dish Network’s new Sling TV service and one reportedly being developed by Apple are lightweight bundles tailored for cord-cutters, Sony is also targeting 18-34 year-old gamers, a coveted demographic that includes many who already take a pay TV service.

“We think the service appeals to both groups,” Benefield said. During the beta trial, PS Vue users averaged three hours per session, he said. But PS Vue might need to differentiate itself more from the legacy multichannel video programming distributor (MVPD) competition, Bruce Leichtman, president and principal analyst of Leichtman Research Group, said. “It appears to be a traditional TV service with a different delivery.”

Leichtman said he believes the service will appeal most to the so-called “cord-nevers” who have eschewed TV offerings from telcos, MSOs and satellite providers.

The cord-never market also is getting more challenging as cable operators try to attract new customers with low-cost introductory bundles.

For example, Comcast, which will compete with PS Vue in Philadelphia and Chicago, is pitching a “starter” triple-play package that includes more than 140 digital channels via its X1 platform, 25-Mbps broadband and voice service for $89.99 per month. The catch is that the price is good for 12 months, and customers must make a two-year commitment.

Sony’s service will also have to contend with usage-based broadband policies. Comcast currently has no such policies in place in Chicago or Philadelphia, but in select markets, including Atlanta, it’s testing a plan that applies a soft monthly cap of 300 Gigabytes per month. When customers exceed that threshold, they are subject to a charge of $10 for each additional bucket of 50 GB.

To avoid that, Sony, along with HBO and Showtime, have held talks with Comcast and other MVPDs about delivering video over managed IP connections that don’t mix with spectrum dedicated to high-speed Internet services, The Wall Street Journal reported. In recent years, Apple has held similar talks with Comcast, Time Warner Cable and Liberty Global, multiple industry sources told Multichannel News.

Quick Facts About the PS Vue’s Debut

Markets: New York, Chicago and Philadelphia

Supported Devices: PlayStation 3 and PlayStation 4 consoles, with the iPad on deck. Sony plans to extend access to connected devices within and outside of its product ecosystem, but has not yet identified them. One possible candidate is the PlayStation TV, a $99 gaming/streaming device that debuted in North America last fall.

Navigation: Cloud-based interface offers several ways for users to browse for and find programming, including “My Shows” and “My Channels” features that create personalized lists of favorites that can be pinned to the screen by clicking on the controller’s “R1” button. The UI also comes with an algorithmic recommendation engine and a “Featured Shows”listing curated by Sony and its network partners.

More Video: PS Vue features a VOD library, a “look back” service for prior episodes of certain TV series, and a cloud DVR that will allow users to record up to 500 individual programs for up to 28 days.  

Cablevision Systems’s recently launched voice-over-WiFi service, Freewheel, is unlikely to be the last such offering, as cable operators continue to add hotspots in their service territories and develop new ways to monetize WiFi technology.

To do that, they need to up their game in terms of the reliability, strength and availability of WiFi access.

Many operators are moving in that direction, but it’s going to take a couple of years for carrier-grade WiFi to be ubiquitously deployed across the country, according to several experts in the field.

A recent survey from Real Wireless for St. Louis-based billings and operations software vendor Amdocs found that carrier-grade WiFi will grow from 14% in 2014 to 85% by the end of 2016. Some 85% of operator respondents said they plan to invest in carrier-grade WiFi by that time.

MARKING MORE HOTSPOTS

The survey found 77% of cable operators will have WiFi hotspots in their service territories by 2016 and 72% of those hotspots will be carrier- grade by 2018, Amdocs chief technology officer, broadband, cable and satellite division Ken Roulier said.

Today’s cable-industry WiFi offerings are predominantly a “best-effort” product, rather than a carrier-grade service. Consumer expectations are currently tamped down because service can be spotty and intermittent.

Customer satisfaction is one of many reasons to upgrade an MSO’s WiFi network to carrier-grade, Caroline Gabriel, co-founder of Hampshire, England-based consultancy Rethink Technology Research, said.

“We believe that one to two years from now, we’ll see full quad plays and most operators will be offering some type of voice service,” she said. “Operators are adding a lot of hotspots very quickly. But the big challenge will be the quality of those hotspots.”

New lines of business and revenue streams that could result include mobile voice; data-offload services for spectrum- constrained mobile operators; and a viable and robust TV-everywhere product, Gabriel said.

Cablevision estimates about 60% of the traffic on its Optimum WiFi network is streaming video. So while having a voiceover- WiFi (VoWiFi) service is attractive glue that makes customers happier with their service provider, the carrier-grade WiFi also enables customers to become truly mobile with all their services, including video.

The world is clearly going wireless and it’s doing so at a breakneck speed. A recent study by Cisco Systems found mobile traffic is expected to grow 18-fold between 2011 and 2016. Cellular spectrum is limited and building macrocell sites is expensive, so small-cell solutions — such as WiFi — are becoming more attractive every day.

Cisco’s study predicts that VoWiFi traffic will surpass voice-over-LTE traffic by 2017. And the number of WiFi-capable tablets and PCs, at 1.9 billion, will outnumber cellular- capable tablets and PCs (542 million) by 2019.

Real Wireless, surveying for Amdocs, found that 66% of respondents are attracted to carrier-grade WiFi networks because of the opportunity to offer mobile voice and real TV-everywhere capabilities.

Mobile network operators (MNOs) see WiFi primarily as an offload product to current mobile offerings. The survey found that 72% of cable operators plan to deploy carrier-grade networks by 2018 while 66% of mobile network operators have similar plans. In other words, MNOs could offload their excess data to third-party WiFi networks.

This is already happening to a degree, the experts noted, but will increase as mobile usage continues to expand.

Cablevision spent $300 million in 2007 to build one of the most robust WiFi networks in the country. The company currently has about 1.1 million hotspots inside and outside the home. It’s naive to say upgrading operators’ networks to carrier grade will be inexpensive and easy, Gabriel said.

But there are plenty of companies, including Amdocs, Cisco and others, that have products and services that will trim those costs and speed up the time to market, she said.

It’s not the first or even the second time cable operators have upgraded their networks to provide new, profitable services, and this latest upgrade promises to be just as lucrative as offering data and voice services have proved to be, Roulier said.

WIRELESS WORLD

Those front- and back-end upgrades to carriergrade status will also be necessary to compete effectively in a wireless world, which is where the worldwide communications industry is headed, noted Kelly Davis-Felner, vice president of marketing for the Wi-Fi Alliance, a global non-profit organization formed in 1999 to create ubiquitous standards and specifications for wireless-fidelity networks.

“For MSOs, [WiFi] is a foray into mobility and allows them to offer voice and data connectivity they haven’t been able to offer in the past,” Davis-Felner said. “It’s easy to envision the day when you don’t have to plug your device into anything.”

With the season crossing into the second half, NBA Digital and InDemand are teaming on a free preview of the league's out-of-market package this week.

NBA League Pass is available as a freeview from Monday Jan. 19 through Sunday, Jan. 25 to digital subscribers of Comcast, Time Warner Cable, Cox Communications, Cablevision, Bright House Networks and Verizon FiOS, plus smaller In Demand affiliates around the nation.

The package offers customers up to 40 live out-of-market games per week across 10 channels. Basketball fans can order NBA League Passat the half-season package price, which includes digital and mobile access, of $99, or four installments of only $24.75. With the package's purchase, subscribers can access NBA League Pass Digitalon an authenticated basis.

In addition to the digital access, NBA League Pass presents  creative and free enhancements, including game replays, dual feeds, a mosaic channel, a stats channel and HD games as follows*:

SAME-DAY REPLAYS: The service re-airs every game in the package starting approximately one hour after the final buzzer so that fans can see NBA action they might have missed.  Each game is replayed in its entirety and repeats continuously overnight and the next day, on the same channel, until the following day’s live matchups begin. Games are available in both SD and HD (varies by system).

DUAL FEEDS: For many games, subscribers also receive innovative dual-feed telecasts, which deliver home-team plus visiting-team local market broadcasts so fans can choose the announcers they prefer.

MULTI-SCREEN MOSAIC: Package subscribers receive the popular rotating mosaic of multiple screens that give simultaneous snapshots of all the live-action games being played around the league, along with scores, time clocks and channel locations. The NBA LEAGUE PASS mosaic can be found on the last channel (10th) of the system’s package lineup. (Mosaic may occasionally be pre-empted to accommodate live games.)

STATS CHANNEL: The NBA LEAGUE PASS Stats Central is a live source for scores, statistics, game previews, game recaps and schedule information. This can be found on the ninth channel of the system’s package lineup. (Stats channel may occasionally be pre-empted to accommodate live games.)

NBA LEAGUE PASS DIGITAL ON NBA.COM:  This feature allows package subscribers to watch NBA LEAGUE PASS games live online at NBA.com or on authenticated mobile devices.  It is included for NBA LEAGUE PASS TV subscribers once their subscription is verified. Complete activation instructions and details are available at: www.nba.com/activate.

The package runs until the last day of the regular season, April 15.. More information about NBA League Pass, cable offerings, game schedules and channel numbers are available at www.getbasketball.com  and general information is at NBA LEAGUE PASS. Customers can order by calling 1-888-SPORTS-iN (888-776-7874) or their local cable provider. Blackout and other restrictions apply.

The American Cable Association continues to argue that the FCC need not and should not reclassify Internet access as a Title II common carrier service to any cable operators, full stop. But if the FCC is not stopped by those arguments, says ACA, it should exclude smaller operators from the new regulatory regime.

In a Jan. 12 filing with the commission, ACA says that the FCC lacks the authority to compel common carrier status on ISP's simply to achieve policy [objectives]." That, it says, would be against the law and exceed the FCC's authority.

But FCC chairman Tom Wheeler has suggested he had an "aha' moment when considering how wireless phone service had flourished under Title II and signaled last week that the FCC was likely to apply Title II to wired, and likely wireless, broadband access services, at least the parts that would prevent blocking, discrimination and paid priority.

ACA said that assuming, for the sake of argument, that the FCC did go that route, it should forbear any Title II regs to smaller operators, including sections 201, 202 and 208, the sections the FCC would likely not forbear.

"Immediate and blanket forbearance would mitigate many of the potential and significant harms that otherwise would result from reclassification," ACA said. "The case for blanket forbearance is particularly strong for ACA members because, as smaller ISPs, it is evident that they wholly lack the market power over edge providers or in their local markets that would justify any need for regulation," it added.

Wheeler has signaled he plans a Feb. 26 vote on new open Internet rules, and that Title II is the likely route to restoring the old rules thrown out by a federal court for lack of sufficient legal justification.

Cord-cutting has proven to be much less of an issue than many people were predicting just a few years ago, prompting some analysts to raise their projections for multichannel subscribers. But if the cord isn’t getting widely cut, the business models that have long sustained the multichannel TV industry are showing some signs of fraying, with the launch of new over-the-top ventures from Sony, Dish Network, CBS and HBO.

How successful these products will be remains open to question, given the problems faced by some earlier OTT offerings like Redbox Instant, which was shut down last year. But the plans are a clear sign of widespread unease about the growth potential of multichannel TV in an era in which Magna Global’s upwardly revised multichannel counts still show a drop from 103.6 million in 2014 to 102.9 million in 2019.

In the light of those worries, we hope that Multichannel News’s annual Viewer Watch Special Report, with its focus on the impact of the changing use of video, will be even more valuable than ever in helping our readers navigate changing audiences in 2015 and beyond.

As in earlier years, the report includes an extensive compilation of data covering virtually every aspect of the pay TV industry, from trends in multichannel subscribers and over-the-top homes to online video ad projections and the use of new consumer electronics devices. In addition, it includes two features based on extensive interviews with more than two dozen top TV executives and researchers.

As always, the goal has been to dig deeply into the data to uncover insights that often upend conventional wisdom about consumer trends and to provide readers with a deeper understanding of how the business is really changing.

Like previous versions of this annual report, this year’s Viewer Watch was made possible with the help of a number of researchers. Among the research organizations that were particularly helpful in providing data were Horowitz Associates, Magna Global, PwC, Frank N. Magid Associates, Nielsen, Fox Cable Networks (which compiled some Nielsen ratings data for this report), and NBCUniversal president of media research and development Alan Wurtzel, (who provided some charts).

Contributor George Winslow compiled the data, conducted the interviews and wrote the articles.

To view the full Viewer Watch report, please click here.

"Health" plays a big part in this week's vocabulary, as friends bid each other a "happy and healthy" New Year.  The International CES will be loaded with digital health products and services, fueled by the frenzy over wearable sensors and wireless monitoring systems. 

Yet cable's oft-promised "tele-health" intentions - especially in the broadband era - remain a mild side-effect in the growing juggernaut of digital wellness ventures.  A CNBC report last week underscored the importance of the health sector, noting that 60% of the fastest-growing small-cap investments are in the medical services, pharmaceutical and healthcare category.

At the annual mHealth Summit a few weeks ago, the wireless infrastructure behemoths (AT&T, Verizon, Qualcomm and Intel) demonstrated their ever-growing tele-health agendas.  (The "m" for "mobile" in the event's title is misleading, since many of the 200+ exhibitors and most of the panel discussions looked at the broader array of "digital" health projects, both consumer- and institutional-facing services.  The growing line-up of digital ventures stood out because a year ago, the mHealth Summit coincided with a "major" Comcast tele-health pronouncement  promising aggressive mobile medical deployment.

Yet, a review of cable's health initiatives in the past year turns up a scrawny handful of projects, such as a Comcast Business deal in October that will put the company's Ethernet Dedicated Internet, Ethernet Private Line and Comcast Business Internet into the Salinas Valley Memorial Healthcare System - basically a system integrator sale.

In March, Time Warner Cable Business Services similarly announced a project with Cleveland Clinic and Tely Labs to conduct a "virtual visits" trial of a videoconferencing service.  The trial involving mere dozens of users will provide follow-up care for cardiac patients.

In addition, several MSOs have expanded their in-hospital operations, mainly offering video and data services to patients and adminstrators.  Overall the industry's involvement remains scant - curious since (as demonstrated during CES and at the mHealth Summit) the opportunities are vast. 

The Consumer Electronics Association forecasts a universe of more than 70 million digital health devices in use by  2018, with product  sales and software - and most significantly for communications providers  -  service revenues seeing the largest growth.  CEA expects digital health products will generate more than $8 billion in revenue by 2018, more than double today's levels.

You can often discern the promise of an emerging industry by the volume and diversity of the forecasts for its success.  Among the recent prognostications and analyses:    

• Juniper Research expects the wearable market (including health/fitness and other products) will grow from $4.5 billion in sales this year to $53.2 billion by 2019.
• Parks Associates predicts more than ten million M2M (machine-to-machine) health connections by 2018.
• StartUp Health, which coordinated many of the incubator-stage exhibits at the mHealth Summit, tallied $6.5 billion of new investment in "digital health" during 2014 (a 125% increase from the previous year), and it expects similar levels of funding to pour into the industry in the years ahead.

Clearly cable's business development deal-makers are aware of this opportunity, although their moves have been largely invisible through the recent digital health frenzy. Given cable's ventures into wireless services (which are vital in the collection and processing of on-the-go sensors and medical monitoring devices), the current silence about health projects is, to say the least, curious.  To be sure, such data transmission needs are miniscule in terms of bandwidth, but the visibility in such an important sector provides all kinds of value.

The FCC and other federal agencies are continuing to encourage broadband health initiatives, as evidenced by November's first "Connect2Health" task force roundtable, which sought input about "broadband-enabled health technologies on the cutting edge."   The task force, chaired by P. Michele Ellison, FCC deputy general counsel, plans to hold additional sessions in a  "Beyond the Beltway" series to identify digital health initiatives and needs.

In the current business evolution, health and wellness care - a controversial and complicated segment that represents about 15% of the U.S. economy - may not be cable's highest priority.  Certainly the unholy trinity -- Insurance, Pharmaceuticals and Hospitals -- that dictate U.S. health policy may make it even more difficult for cable to establish its role in providing appropriate health services. At the mHealth Summit, many exhibitors quietly groused that their companies' dreams continue to be stymied by the absence of "payers" (i.e. insurance companies) at the event and in the game so far.

So it may be that cable is not the only sector sitting on the sidelines as the digital health wheels spin.

Yet, the continuing consumer and market enthusiasm - and the social value - of improved health service via telecom platforms augur important opportunities for providers with customer-facing relationships. 

If you know of cable ventures into this sector, I'd like to hear about them because so far, the industry seems comatose.

Gary Arlen examines new telecom services/ventures at Arlen Communications < www.Arlencom.com  >.  Send your tele-health project tips to GArlen@Arlencom.com.

When it came to compensation, 2014 was another good year for the cable television industry across various disciplines.

The Cable and Telecommunications Human Resources Association’s (CTHRA) 2014 Annual Compensation Surveys found that the average salary adjustment budget grew 3% across the industry, matching the uptick in 2013.  MSOs increased at a 3% clip, equal to the prior year, while programmer’s added 3.1% to their salary budgets, versus a 2.9% bump the prior year.

However, advances were much greater among those working in technology and digital media. In addition, compensation soared across a number of sales positions.

For their part, executives, especially among MSO leaders, notched sizable incentive grants.

“Rising salaries illustrate the cable industry’s nimble response to changes in the competitive landscape, which includes a fierce battle to attract and retain technology and digital media talent,” said Pamela Williams, CAE, CTHRA’s executive director.

Added Hali Croner, CEO of The Croner Co., which conducted the surveys for CTHRA:  "Cable operators are now competing with more companies for technology talent. The presence of over-the-top companies has upped the game for MSOs seeking to find, recruit and retain top digital talent."

Data for the 2014 survey was gleaned from 65 participating companies -- 16 distributors and 49 programmers – up from 63 in 2013. CTHRA said the participants represented the majority of the industry’s employers, including all 25 of the top national cable channels, all five national broadcast networks, new content providers and seven of the eight largest cable operators, plus DirecTV.

Survey results are industry-specific, providing analysis of pay practices for nearly 150,000 incumbents, including both exempt and non-exempt positions, from technicians to the executive suite.

Read the full press release here.

Buoyed by more content and greater consumer awareness, the Cable & Telecommunications Association said eight months into its educational efforts, it is charting significant progress toward its goals of boosting TV everywhere sign-in and usage across the cable industry.

CTAM has launched a consumer awareness communications tentpole initiative, outlining the significant benefits and value proposition of TVE -- an ever-growing collection of programming, across all genres and including live news and sports, at no additional costs to verified viewers -- to a broad audience, using social and earned media channels.

The move comes as Netflix and Amazon continue to add subscribers and other over-the-top providers are joining the fray.

For cable operators, it’s a simple problem with a maddeningly complicated answer: How to let paying subscribers know they already have access to favorite shows on favorite devices?

To fortify a collection of current, approved promotional assets for media placement, CTAM has built a secure e-form that makes it easy for content providers and MSOs to participate.  

The core messaging emphasizes the ease of the sign-in process to verify customer status and clarifies how the content can be accessed earlier than other online and mobile platforms. The communications promote current TVE programs to encourage non- or infrequent users of Apps and websites to learn about how it works and what’s available. The approach brings the platform to life by illustrating the viewing possibilities, which are illustrated with a “You Could Be Watching TV” theme (youcouldbewatching.tv) and #youcouldbewatchingTV hashtag.

“Netflix didn’t invent this. Cable providers are offering a better product, with more diversified programming offering that includes live sports and news, all at no additional costs,” said CTAM president and CEO John Lansing.

Underscoring the drive was  Fox Networks’ “Stream It and Dream It Sweepstakes” promotion that ran last month, touting authenticated streaming apps as FOX NOW, FXNOW, Nat Geo TV, BTN2Go, and FOX Sports GO. The two-week initiative, which also granted non-subscribers a two-hour temporary pass to access the content on Fox Broadcasting,  FX Networks, Fox Sports 1, BTN, regional sports, National Geographic Channel and Nat Geo Wild, sought to drive TVE awareness and usage that also offering participating users/viewers a chance to win $25,000.

The endeavor, aligning with CTAM-led tactics, paid dividends resulting in a unique reach of 3 million and 56 million total impressions, boosting promotional value for Fox Networks and distributors, whose combined bases exceeded 100 million homes, according to the marketing group. 

The outreach is being managed by CTAM and The Lippin Group, which are working toward educating consumers and promoting available TVE content. The results thus far have yielded the placement of TVE streaming highlights in mainstream TV and lifestyle sections in newspapers, including The New York Times and U.S.A. Today..

“We have also gained with influencers and bloggers reaching 25-to-39-year-olds,” said CTAM senior vice president of communications and marketing Anne Cowan. “This is a group that loves to watch online.”

When CTAM initiated its education campaign last April its stated goals were to drive aided awareness of TVE, which was only at a 20% level, to 65% in January, as well as push usage of cable subscribers familiar with the platform to 55%. Through mid-October, a study conducted by Hub Entertainment Research, indicated that aided awareness had climbed to 54% of the survey group, while 49% said they had used TVE to view TV content at least once over the past six months.

Moreover, CTAM wanted 75% of its 23 member companies participating in the TVE space to adopt the sign-in recommendations developed by a steering committee in conjunction with OATC, NCTA, CableLabs, Adobe and member partners. Through mid-October, all CTAM TVE companies are using some to all of the best practices, at an average of 52% overall.

“We set out at the beginning of the year to have a measureable impact on awareness and usage of TV everywhere – and given this unprecedented industry participation and support, we have done just that,” said Gemma Toner, senior vice president of business insights and strategy, Cablevision Systems and CTAM chairwoman.  “This initiative from CTAM, designed to drive usage and awareness among consumers, will help to elevate this product category now and into the future.”

Recent HUB Research showed that 61% of millennials reported that access to TVE services made them feel more positive about the TV provider and 56% said the same about the network they’re watching.    

“TVE users ascribe greater value to their cable packages, with millennials, the most-at-risk group, having the most positive reaction to TVE,” said Lansing.

CTAM isn’t the only group proclaiming TVE’s rising metrics.

Adobe data indicates that authenticated content starts soared 388% in the second quarter, over the corresponding year-earlier period.

Comcast-owned advanced advertising company FreeWheel reported last month that verified viewers leaped 368% year-over-year, with 46% of all video ad views on long-form content (20 minutes or more) and live content coming from behind authentication walls.

Still, CTAM recognizes much more work needs to be done as Netflix and extant players gain more traction, and others are poised to enter the marketplace.

Distributors and networks own TVE brand development aside, the industry will also be working toward improved verification for kids, families and Hispanics. There will also be a CTAM drive toward the development of extending sign-in periods, and having subs secure access across a programmers’ suite of networks. For example, after a user signs in to watch HGTV, she would then have access to the other Scripps Networks Interactive services: Food Network, Cooking Channel, DIY, Travel Channel and Great American Country.

Also on the docket: CTAM will present TVE-focused executive panels at the Television Critics Association (TCA) Winter Tour in January. It also has engaged in a partnership with the NCTA to deploy a pavilion at INTX (formerly The Cable Show), one of five pillars at the industry gathering with and toward further forging excitement about the growth of TVE throughout the entertainment industry. 

A late-summer tentpole consumer event is in the early planning stages.

CTAM’s progress comes as EchoStar is taking stabs at TVE with an ad campaign touting retail sales of its place-shifting Slingbox devices. The creative trades on a made-up coalition called “Can’t Watch Anywhere Pain” or C.W.A.P. tagline, which takes aims at the programming holes in the cable industry’s TVE lineup.

 The officials quickly engaged the challenge. “In my view, [EchoStar] views our TVE as a threat,” said Cowan. Lansing added: “That’s great. Game on.”

As residential customers continue to cut the cord, cable telecommunications firms are increasingly focusing their sights on commercial customers, offering broadband, video, voice, hosting and cloud-computing services that generate healthy margins and foster long-term relationships.

Initially, most operators had basically offered their triple-play services to small and midsized businesses. Today, the business-services segment has expanded into new products and is catering to bigger, national clients.

It’s profitable, too. Business clients typically spend more each month, with some spending as much as $1 million a year, Douglas Fantuzzi, vice president of operations support systems and network solutions, cable and satellite, at software and services vendor Amdocs, said.

STABLE, HIGH MARGINS

Commercial clients also offer stability, often signing multi-year contracts at profit margins higher than those for residential customers.

Revenue from No. 2 MSO Time Warner Cable’s commercial-services business more than doubled to $2.31 billion in 2013 from $1.11 billion in 2012, and now accounts for more than 10% of the company’s overall revenue, per Forbes.

Cox Communications, among the first operators to dive into the commercial-services pool more than a decade ago, is on track to generate $2 billion from the category by 2016, Steve Rowley, senior vice president of Cox Business, said. Today, it counts 330,000 commercial clients; about 80% of those are small businesses that account for 65% of the unit’s revenue.

Mediacom Communications, serving predominantly small and rural markets, has seen the internal rates of return from business services grow by more than 20% annually each of the last four years, Dan Templin, senior vice president of Mediacom Business and president, Mediacom Telephony, said.

Mediacom is working with local governments and economicdevelopment organizations in its service territory to deliver broadband services considered vital to their economies.

“Broadband today is like the railroads were 100 years ago,” Templin said. “Without it, towns die. We are all about public-private partnerships to make sure that connectivity exists in our rural communities.”

Central Iowa, for example, is increasingly attracting high-tech companies wanting to build informationtechnology facilities, call centers and data centers that require reliable, high-speed connectivity. Mediacom’s Gigabit+Fiber solution is an enticement those towns need to lure those businesses, Templin said.

Commercial services require a higher level of network reliability and customer service. Most MSOs are retooling and stabilizing their automation processes to handle the greater volume.

A recent survey conducted by website Heavy Reading for Amdocs found that operators need more tools to automate those procedures and monitor the complex order execution processes. Of the 50 operator entities surveyed, 44% said they aren’t satisfied with their current Operations System Support (OSS) solution and are willing to invest in a better one.

The most common order-related complaint from commercial customers is missed installation deadlines (47%). This creates a need for a unified orchestration process, Yosi Mor Yosef, marketing manager for Amdocs’s OSS division, said.

Being able to see where an order is in the process at any given time, and providing self-service capabilities for commercial customers, were rated the most important feature by 35% of respondents.

The wholesalecarrier business has perhaps the most significant upside potential, Amdocs’s Fantuzzi said. The need for backhaul services connecting small cells to fiber networks is increasing at breakneck speeds. A Real Wireless survey conducted in January found that 70% of mobile network operators are willing to use small-cell networks rolled out or owned by a third-party partner, such as a cable company.

Cox is deploying a new business-services platform — Atlas — to accommodate its growing commercial services business. Atlas has its own separate billing, installation and support staff as well as separate customer relationship management, order-entry and support staff, plus sales and tech support, Rowley said.

Two years in the making, Atlas has involved more than 100 people across every division.

EFFICIENCY EFFORT

“We are constantly trying to further automate our processes so we can fulfill orders more quickly,” Rowley said. “We have installed a new, scalable system that allows us to be more efficient on the front end and back end by standardizing processes and centralizing operational functions. And we have installed more diagnostics so we are smarter and proactive. It’s been a huge undertaking.”

The cloud is ready to rain down some new video providers to take on cable TV.

Using the unwieldy moniker of “virtual multichannel video programming distributor,” these new services, despite their relative tiny size, are trying harder than ever before to gain traction with consumers.

Sony’s introduction last month of PlayStation Vue, a cloud-based pay TV offering, was a watershed moment in the “virtual” MVPD era, picking up where Intel Media left off after the unit got cold feet and punted its “OnCue” assets to Verizon Communications.

A wave of over-the-top services, including new entrants and veteran players, is ready to crash various pockets of the pay TV market, presenting everything from full-freight off erings to trimmed down, personalized packages tailored for the small, but growing crowd of costconscious but still tech-savvy cord-cutters.

While the notion of the virtual MVPD has been percolating for years, several stars have aligned to make the idea a reality. The continual increase in speed and reach of broadband services, combined with the proliferation of IP-connected video devices have set the stage for an increasing number of programmers to embrace new over-thetop distribution models.

Meanwhile, help is also coming from regulators as the Federal Communications Commission pursues new rules that would define some online video distributors as MVPDs and make it easier for these new competitors to negotiate for coveted distribution rights.

But even those factors won’t guarantee that virtual MVPDs will be successful, let alone shake up the pay TV market. Still lacking are details on pricing and packaging, making it di fficult to predict how well these new OTT services will perform in the already saturated market for TV viewers.

“It’s like having a cake in the oven and guessing how good it tastes,” Bruce Leichtman, president and principal analyst of Leichtman Research Group, said.

Still, analysts agree that smart pricing paired with a service outfitted with intuitive features (but mostly pricing) will help to determine the future of this new breed of MVPD.

“The technology will not be enough of a differentiator to get people to move [providers],” Colin Dixon, founder and chief analyst of nScreenMedia, said.

And there’s no uniform way to approach the market, as there appear to be some material differences in how these virtual MVPD services will be priced, as well as the size and scope of the audiences they will target.

The anticipated price of Dish Network’s coming over-the-top service will be about $1 per day, making it particularly appealing to cordcutters, college students and a broader group of millennials.

But millennials won’t make for easy prey. nScreenMedia found in a survey that 19% of consumers in that age group have never subscribed to a pay TV service, and just 2% of that group said they are considering subscribing in the next three months.

Sony, meanwhile, appears to be gunning for a fuller pay TV service that more closely mimics traditional offerings.

While Leichtman believes Sony’s large embedded base of PlayStation consoles gives it an important advantage, the company will likely need to find a way to offer more for less than its well-entrenched cable, telco and satellite-TV competition.

“Trying to do the same thing that an existing service already does obviously is going to be a greater challenge,” Leichtman said. “The industry is changing, but not by doing the same thing. The question is, what’s going to be the glue for the new services?”

That’s where new technologies and features will come into play. If that glue involves the integration of apps such as Netflix and the use of more intuitive interfaces, many incumbents are already doing that now or have it on their roadmaps.

“The problem [for new entrants] is companies like Comcast with X1 are already claiming a lot of these advanced features,” Dixon said.

The task ahead for these new MVPDs won’t be easy. Here’s a glance at some that will be taking their shot at pay TV glory.

Sony: A New ‘Vue’ on Pay TV

Sony hasn’t revealed pricing and packaging for its new service, called PlayStation Vue, but the initial invitation-only offering will feature about 75 channels per market, a number that’s expected to increase as the CE giant inks more programming deals.

Notably, PlayStation Vue will feature a fancy user interface that supports catch-up and video-on-demand services, and a helpful component that will make the past three days of “popular programming” available without the need to schedule individual recordings.

Sony is also putting a unique twist on the cloud digital video recorder, freeing customers from having to worry about storage and recording conflicts, with the trade-off that recorded shows won’t be kept longer than 28 days.

Sony has put a clear focus on its initial targets — the more than 35 million PS3 and PS4 owners in the U.S. who like video and are also looking for a new and potentially better pay TV experience.

“We know that highly engaged gamers are entertainment junkies that spend a lot of time using their PlayStation, and increasingly for other entertainment including SVOD services rather than watching traditional cable TV,” a Sony o cial said, noting that the company has seen video streaming on the platform surge 40% each year for the last three years, and that the average user watches three hours of video per session. “They want the same great PlayStation experience with their live TV content, but with a better user experience and less hassle.”

Dixon said he believes that Sony, despite the new features and capabilities that will grace PlayStation Vue, will need to undercut the incumbents on pricing, at least by a little bit. “It cannot announce the same price or be more expensive and in any way be successful,” he said.

Todd Juenger, a senior analyst at Bernstein Research who got an early look at the PlayStation Vue service, took an educated guess on how Sony might price its service.

Given the networks that have been announced, Juenger said he doesn’t see it fetching anything less than $30 per month — and likely more than $35 — based on estimates that Sony’s affiliate fees will be in the range of $23 to $28 per month. As Sony looks to flesh out its programming lineup, those fees could rise to $45 to $50 per month.

That, Juenger wrote, could put PlayStation Vue’s retail service in the neighborhood of at least $60 per month, resulting in a “razor-thin margin, especially after including operating costs.”

Sony, he wrote, “faces the same catch-22 as every other MVPD. The more networks included in the service, the more appealing it will be … On the other hand, the more networks it includes, the more expensive the product will be.”

Sony has not yet outlined its strategy for homes with multiple TV sets. However, PlayStation Vue will eventually be made to work on devices other than the PS3 and PS4.

Dish Network to Serve Up Skinny TV

Rather than cannibalizing itself with an OTT offering that would replicate its primary satellite-TV service, Dish Network’s plan is to expand the pie by targeting consumers who aren’t current pay TV subscribers with slimmeddown programming packages that will cost about $30 per month.

Dish declined to comment for this article, but the service it is developing is sometimes referred to as a “personalized subscription service” because some programming will be limited to a single stream per subscriber, and because it will look to drive value using targeted advertising.

“We know that [consumer segment] is growing by 4 [million] or 5 million a year, and probably will continue to grow and probably accelerate,” Charlie Ergen, Dish chairman, said on the company’s recent third-quarter earnings call, confident that the company will meet its self-imposed deadl ine to launch the OTT offering by year-end.

Dish expects the coming service to appeal to consumers who are 18 to 35 years old, and skew toward a male audience and sports enthusiasts.

“We’re not going after the guy who spent $100 a month and has got a house and four TVs and three kids, and he’s 55 years old. That is not the target market,” Ergen said.

Dish appears to be willing to experiment and give its new OTT offerings time to find its niche. “I don’t think it’s going to change the world in the first few months,” Ergen said. “But I think that it’s something that has a long-term path trajectory.”

Ergen also expects the OTT product to carry a smaller margin and a higher churn rate than Dish’s core business, but counterbalanced by materially lower subscriber acquisition costs, certainly well below $800.

“When you look at total return, we … would anticipate that it would be as good or better than our core business,” Ergen said, believing that the advertising piece of an OTT offering will be “materially higher” than what Dish gets now with regular linear TV. “When you run all the numbers, to the extent that you’re getting incremental subs, it makes sense.”

Layer3 TV: Cryptic Video Plans

Layer3 TV, a Denver-based startup made up of cableindustry veterans from companies such as Comcast, Motorola and Time Warner Cable, bills itself as a “next-generation cable operator,” but has kept mum on its specific plans, including whether it will look to pair up with an existing MVPD or strike out on its own.

But the types of jobs it’s been trying to fill (senior director of customer care, senior user experience designer, embedded application developer and digital rights management and content security engineer, among them), as well as its development of a distribution center in the Denver area, appear to show that Layer3 TV’s intentions are to create a service almost from scratch, enabling it to go direct to the consumer over broadband.

While Layer3 TV’s still being secretive about its specific service plans and which markets it might target first, CEO Jeff Binder did confirm that the company, which has raised $21 million so far, intends to launch sometime next year.

Despite its relatively low public profile, Layer3 TV has been bending the ear of the Federal Communications Commission in meetings that indicate that its product will indeed be delivered over-the-top.

According to ex parte filings about recent meetings with the FCC, Layer3 TV hasn’t taken a position on Comcast’s proposed acquisition of Time Warner Cable, but has been discussing network-neutrality “safeguards” and conditions that the FCC might consider if it were to approve the deal.

Among Layer3 TV’s suggestions: the ability to interconnect, “for a reasonable price,” at locations close to the customer base a company is trying to serve; while also presenting the position that data caps, while “appearing to safeguard a network from overload,” also create challenges for companies that serve video streams to consumers.

Layer3 TV also suggested that the FCC should think about “some cap on peering charges based upon the total payload in a given month whereby the costs are not so prohibitive as to prevent potential video competition.”

Wireless Wildcards

Next year is also expected to be a big one for some of the nation’s largest mobile service providers as they prepare over-the-top services that will give them a foray to the TV.

One company that will help them make that jump is MobiTV, which is developing a “white-label” streaming stick that will connect to TVs via the HDMI (High-Definition Multimedia Interface) port and deliver video over WiFi.

No wireless carriers have announced plans for such a virtual MVPD service, but likely candidates are MobiTV’s existing carrier partners, which include AT&T, Sprint, US Cellular and Verizon Wireless.

And as timing goes, there’s an expectation that more details about those plans could emerge at next month’s Consumer Electronics Show in Las Vegas, the site where Sony announced that it would begin to test a virtual MVPD and set this trend in motion.

Sony PlayStation Vue

Launch date: Invite-only beta debuted in November in New York. Commercial service launches are slated for the first quarter of 2015 in Chicago, Philadelphia and Los Angeles.

ANNOUNCED PROGRAMMING PARTNERS:

CBS: CBS’s live linear feed in owned-and-operated TV markets, plus video-on-demand.

Discovery Communications: Discovery Channel, TLC, Animal Planet, Investigation Discovery, Science, OWN: Oprah Winfrey Network, Discovery Family Channel and 11 more brands.

Fox: Fox’s O&O TV stations; Fox Networks Group’s portfolio of national entertainment programming services, including FX, FXX, FXM, National Geographic Channel and Nat Geo Wild; Fox Sports’ national and regional programming services (Fox Sports 1, Fox Sports 2, Big Ten Network; Fox’s regional sports networks, including YES Network and FS Prime Ticket).

NBCUniversal: All local offerings from NBC, Telemundo and regional sports networks; as well as Bravo, CNBC, E!, NBCSN, Oxygen, Sprout, Syfy, USA Network and others.

Scripps Networks Interactive: HGTV, Food Network, Travel Channel, DIY Network and Cooking Channel.

Viacom: BET, CMT, Comedy Central, MTV, Nickelodeon, Palladia, Spike, VH1 and others.

Advantages: Out of the chute, Sony can wield its well-known brand and target a base of 35 million PlayStation 3 and PlayStation 4 customers, offer a broadband-connected video platform that has already been integrated with Netflix, Crackle and many other popular over-the-top apps and deliver everything off of an agile, cloud-based architecture. No truck rolls.

Disadvantages: If the plan is to match up with a lineup that’s very similar to what competitors offer, the challenge early on will be to fill programming gaps and add channels from The Walt Disney Co., A+E Networks, Time Warner Inc., and Turner Broadcasting System. To undercut incumbent pricing, Sony will likely have to buy share by sacrificing service margins.

For Sony, like all virtual MVPDs, the quality of the video service will depend on the quality of the subscriber’s broadband connection.

Dish Network

Launch date: Before the end of 2014. Dish hasn’t named the service, but Dish Digital LLC has registered the “NUTV” trademark.

Announced programming partners:

The Walt Disney Co.: For ESPN, ESPN2, ABC, ABC Family and the Disney Channel networks.

A+E Networks: For A&E, Lifetime, History, LMN, FYI, H2, History En Español, Crime + Investigation and Military History.

Scripps Networks: For HGTV, DIY Network, Food Network, Cooking Channel, Travel Channel and Great American Country.

Advantages: Dish has a core pay TV business with millions of customers to fall back on, giving it the ability to experiment with new types of programming packages, pricing and targeted advertising systems that would appeal to cord-cutters and millennials.

Disadvantages: Narrow market focus and limited programming lineup could prevent the new OTT offering from extending beyond a small, niche audience.

Layer3 TV

Launch date: Sometime in 2015.

Announced programing partners: None. But it’s looking to change that following the recent appointment of Lindsay Gardner, the former Fox Networks and Cox Communications executive, as content advisory chair.

Advantages: Flush with startup specialists, as well as seasoned MVPD operations and engineering talent.

Disadvantages: If Layer3 TV’s plan is to pursue the market without MVPD partnerships, it will start with zero subscribers, providing a challenge to sign up customers without an established consumer brand.

HBO CEO Richard Plepler doesn’t agree with those who say the premium network’s plan to offer its broadband HBO Go service to non-HBO subscribers will eat into the premium network's subscriber base.

“I don’t think it’s cannibalistic at all,” said Plepler during a session held by the Paley Center for Media as part of its International Council series. “We’re going to have a big business with [MSOs] and we’re going to have a big business with new partners.”

In fact, Plepler argues that since most consumers around the country get their Internet service from their cable companies, those operators would only serve to benefit. “Who controls the broadband pipes in the U.S.? Our distributors,” he said. “There is gold in the hills, lets go get it together… it's your money too.” He estimated there are roughly 10-15 million broadband-only homes.

Read more at B&Chere.

With all of its regionals that have team deals now live-streaming NBA games in-market, Fox Sports Net has begun to promote the pro hoops TV Everywhere experience with local marketing activities.  

Fox Sports Wisconsin last week tipped off promotional support for the availability of live-streaming of Milwaukee Bucks contests to authenticated subscribers, according to a Fox Sports spokeswoman. Similarly, Fox Sports Indiana, home to the NBA Pacers, this week will initiate a marketing campaign alerting viewers that they can access streamed simulcasts of the RSN’s coverage at Fox Sports Go.com or through Android or iOS-supported devices. Upon signing on with Fox Sports Go, authenticated subscribers can then watch the NBA team that is available through their pay-TV package. 

After testing the technology with a number of distributors and a handful of clubs last season, all 17 of Fox Sports Net's regional sports networks with NBA team deals are now streaming the contests, as well as pre- and post-game fare, in-market, including YES Network.

As part of the Fox Sports Go offering, the RSN, which televises Brooklyn Nets games, launched the service to Time Warner Cable customers on Oct. 29 with the team's 2014-15 season opener against the Boston Celtics (pictured). Cablevision subscribers gained streaming entry last week. YES is also streaming encores of the team’s telecasts, Nets Magazine, The Michael Kay Show and some college basketball.

Like the other FSN regionals, the YES simulcasts feature commercials from the telecasts themselves. Fox Sports originally included “slates” in the pods. The spokeswoman said the company is working on integrating dynamic ad insertion to the mix, with an eye toward streaming distinct spots during the second half of the season.

The six Comcast SportsNet regionals that have launched NBA in-market streaming are running separate ads from the RSNs’ TV schedules.

MSG Network has announced it will commence streaming New York Knicks games in December. 

DirecTV Sports Networks president Patrick Crumb in a recent interview said his group has reached an agreement with the NBA for in-market streaming, and hopes to offer TVE service for the Utah Jazz and Houston Rockets sometime later this season.

Thus far, Fox Sports has inked NBA TVE deals for its RSNs with Time Warner Cable, Charter Communications, Cox and Cablevision, AT&T U-verse, Suddenlink, Wide Open West and MidContinent Cable. Negotiations continue with other key distributors: Comcast, DirecTV, Dish Network and Verizon FiOS.

The addition of Time Warner Cable has bolstered the TVE streaming presence for a number of NBA teams, including Milwaukee. FSN Wisconsin is now running promos for the service during pre-, post- and in-game Bucks telecasts. Announcements are also delivered over the public address at the BMO Harris Bradley Center, where Fox Sports Girls have also demonstrated how the Fox Sports Go app works.

A similar plan will be executed for the Pacers this week and then be extended to various RSNs over the course of the season, according to the Fox spokeswoman.