June 15, 2009

TWC Exec Discusses Verizon, AT&T

Last week Time Warner Cable's COO Landel Hobbs fielded a broad range of questions at Credit Suisse's Global Media and Communications Convergence Conference in Dana Point, CA, ranging from competition to wireless to online video.

Asked about competition from Verizon and AT&T, Hobbs said the two telcos overlap 22 percent of TWC's footprint, with 15 percent of that allocated to AT&T and seven percent to Verizon. But he said the telco buildout seems to be slowing somewhat.

"We've never said we won't lose some subscribers; we will," said Hobbs. "It looks like a traditional overbuilder situation. There's typically a pop when someone moves into the market, and then it levels off."

Although Verizon, and to a lesser extent AT&T, have put the fear into the cable industry with their deployments of fiber, Hobbs pointed out that the telcos still have plenty of copper to contend with.

"Even if the telcos complete their build-out like we've talked about, I'll still be competing against DSL in roughly two/thirds of the footprint, and I've got a better product than DSL," Hobbs said. "We're also lighting up DOCSIS 3.0 in New York City later this year."

Verizon's CTO Dick Lynch acknowledged last week at an RBC Capital Markets' conference that the company probably won't invest in upgrading its DSL plant. "I'm not convinced that they (upgrades) are economically viable for the long term," said Lynch. "There's a lot of complexity to them, and they're also copper based."

Also related to telco competition is the race toward being first to market with mobile broadband. (For more on Verizon's plans with LTE, click here.) TWC, along with other cable companies, has aligned its mobile broadband future with Clearwire's WiMAX network. (For more, click here.)

Lynch said Verizon expects to roll out LTE by the end of 2009, and Hobbs said, "We should light up towards the end of the year a couple of markets with the first product - a wireless card inside your computer."

Finally, Hobbs talked about TWC's TV Everywhere initiative to put its cable content online. (For more, click here.)

He said the "heavy lifting" was going to be working out the business rules. "From a technological perspective, it can be done fairly easily," he said. "We've been testing with HBO in Wisconsin for quite some time. If I had our engineers sitting here, (they'd say) we could do it today."

Hobbs confirmed some reports that TWC is working with Comcast on online video technical issues. "We and Comcast may have a different view as what Websites to authenticate. With regard to the technology itself, the engineers are talking."

- Linda Hardesty

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