Frontier Communications will not roll out a national IPTV service to compete with cable operators in all of its service areas, but is still exploring its options for providing pay-TV service in larger cities.

That decision, announced by executive vice president and chief financial officer Donald R. Shassian, came at last week’s Global Technology, Media, and Telecom Conference sponsored by Wall Street investment bank J.P. Morgan.

Shassian used the occasion to clarify remarks made during the company’s first-quarter results conference call, which caused some shareholders and analysts concern about the company’s lackluster performance, capital spending plans, and company debt that will come due early next year.

Shassian said Frontier will not deploy U-verse-like IPTV service across its entire national service area, but is considering the future option of delivering the service (and better broadband speeds) theoretically in selected markets.

Shassian also raised the prospect of modifying part of its acquired fiber-to-the-home FiOS network to fiber to the neighborhood technology that companies like AT&T are currently using. But for the foreseeable future, most Frontier customers will have to subscribe to satellite television if they want a video package with their home phone and broadband service.

Stop the Cap! was the first to report Frontier was considering licensing AT&T U-verse to use in selected larger markets where the company has lost considerable ground against cable competitors that deliver consistently faster broadband service.

Wall Street reaction to the proposal has been negative, with concerns Frontier will need to spend hundreds of millions, if not billions, to deploy such a network.

Shassian sought to distance the company from any suggestion they will further increase spending on network improvements. In fact, Shassian says Frontier will end its broadband expansion program, and the extra spending to pay for it, by 2013.

“Our capital expenditure spending will decrease in 2013 as the geographic broadband expansion of our network concludes,” Shassian said. “We expect capital expenditures to drop by approximately $100 million in 2013.”

In lieu of national IPTV service, Frontier remains committed to its resale partnership with satellite TV provider Dish Network. But Shassian did admit U-verse technology is among the options the company is exploring to remain competitive.

Surprisingly, Shassian also said the company was considering partially modifying its acquired FiOS network in Indiana and the Pacific Northwest, because of the cost savings it could deliver.

“We have been evaluating alternative platforms which could generate savings from capital expenditures, video transport and even content costs that can be significant to the FiOS video market business,” Shassian said. “I want to be clear that we have no plans to deploy IPTV across our nationwide network and therefore do not see upward CapEx pressure from any potential changes in our facilities-based video strategy.”

Asked about the potential cost savings afforded by swapping out FiOS technology for IPTV fiber to the neighborhood service, Shassian said it could open the door to expanding service in areas where existing copper-based last mile network facilities can sustain a minimum of 20Mbps broadband service. Frontier claims 1.9 million homes in its service area can receive 20Mbps today, of which 600,000 are currently within a Frontier FiOS service area.

“If we changed, we may have to change out set top boxes on [existing FiOS customers],” Shassian said.

In this clip, Frontier Communications’ executive VP and chief financial officer Don Shassian speaks to a J.P. Morgan investor conference in Boston about the company’s broadband and IPTV plans. (May 15-17, 2012) (4 minutes)
You must remain on this page to hear the clip, or you can download the clip and listen later.

The implication of substantially altering the company’s existing fiber-to-the-home network baffled some analysts.

One, who talked with Stop the Cap! asking not to be attributed, suspects Shassian’s role as a financial officer at Frontier may explain part of the mystery.

“He’s not the chief technology officer, and I suspect he is partly confused about the different technologies,” the analyst explains. “I can’t see Frontier tearing down their current network, but it may make sense for them to switch technology strategies when considering if and where they can expand their network.”

“Frontier’s first quarter results were more than disappointing, and the company is being exceptionally cautious about anything that requires spending right now,” the analyst said. “The next shoe to drop is another dividend cut, which would kill the stock in the market, and if we think Frontier will spend a billion to improve its network, that dividend is going down.”

Our source says he does not have much confidence in Frontier’s current management.

“They talk a nice story, but the numbers never finally add up,” he says. “Rescuing wireline is expensive and companies always promise it will cost incrementally little to expand revenue-enhancing broadband to their rural customers, but if that were true, the companies would have already done it, and without significant spending they have not.”

Time Warner Cable's old branding for broadband

Time Warner Cable is nearing the end of a licensing deal that has allowed the company to use a familiar Warner Bros. animated character to promote their broadband service.

The company has spent at least a year transitioning customers away from the Road Runner brand name, now simply referring to their broadband product as “Internet” or, in some markets, “HSI” — High Speed Internet.

The “brand refresh” comes as Time Warner tries to associate all of its products and services around its traditional “eye-ear” logo, according to company spokeswoman Jeannette Castaneda.

Licensing the Road Runner character as the broadband service’s mascot has also been expensive, and the continued need to use the character to educate consumers about the speed benefits of cable broadband over DSL has diminished in importance.

The new look

The transition away from the Road Runner brand has been ongoing since last summer, but Broadband Reports notes numerous markets will see the brand and logo eliminated completely effective May 19th.  The company is also using the occasion to adjust pricing and tiers of its broadband service.  Hardest hit will be standalone broadband-only customers, who will now pay $53.95 a month for Time Warner’s standard 10/1Mbps Internet service. New customers will also pay a modem rental fee of $2.50 a month. Standalone Turbo (20/2Mbps) customers will pay $73.95 for their Internet service.

Time Warner Cable’s a-la-carte pricing for broadband is designed to make their bundled service offerings more attractive in comparison. The company will sell you Internet-only service for $73.95, or sell you a triple play package of phone, Internet, and television service for just $16.04 per month more on a 12-month promotion.

Broadband Reports‘ source lists pricing for one unspecified market:

• $53.95 for Time Warner’s 10/1Mbps Standard Internet
• $20.00 additional for 20/2 Turbo
• $30.00 additional for 30/5 Extreme
• $50.00 additional for 50/5 Ultimate
• $29.95 for 1/1 Lite (Usually a retention only offer)
• $42.95 for 3/1 Basic

Customers can avoid paying regular pricing by bundling multiple services together, getting a customer retention deal when threatening to cancel service, or bouncing between a six-month new customer promotion available from Earthlink over Time Warner Cable and the cable company’s own broadband promotional offer, good for 12 months. Both cost $29.99 a month in many markets.

Time Warner Cable's marketing machine pushes customers towards multi-service bundles. New customers pay even less.

[flv width=”480″ height=”380″]http://www.phillipdampier.com/video/Road Runner 2002 Ad.mp4[/flv]

A Time Warner Cable Road Runner advertisement from 2002.  (1 minute)

Shaw Cable has pulled the plug on its complimentary cable radio service on Vancouver Island, which used to provide enhanced FM reception of radio services from across the province and from the United States.

Listeners in the Vancouver area never received notification the service was being terminated, and a Shaw spokesman said the company did not bother because it was a free service delivered to cable customers.

Some listeners called the loss of more than 20 FM stations devastating, leaving them with as few as three clear stations, and no reception of CBC Radio 2 from Canada’s public radio network.

Kerry Hunt, Shaw’s regional manager for Vancouver Island, said the company is phasing out the FM radio service in order to increase Internet speeds and make room for additional digital cable channels.

“Nobody is installing FM anymore,” Hunt told Canada.com. “It’s just a service that is very rarely even being used.”

Gone for some B.C. listeners

Hunt called cable radio anachronistic in the digital and Internet age, and those customers who value the service are now being pushed to use Internet streaming services, offered by many of the stations listeners lost. But those streams count against the company’s Internet Overcharging usage caps, and with many of cable radio’s fans among the less-computer-savvy elderly, the expense to add broadband service to continue listening to radio stations they used to receive for free is a hardship.

Cable radio service is a legacy service, originally introduced in the 1970s and 1980s to provide enhanced radio service to cable-TV subscribers over cable-wired FM receivers. Some cable systems delivered national radio superstations, college stations not available over the air, or distant regional radio signals not well received by cable subscribers.

The Canadian Radio-television and Telecommunications Commission used to require all Canadian cable operators provide the service, converting all area AM signals for FM reception. Those rules have been considerably relaxed, and today most cable operators deliver the bare minimum, including one CBC Radio service, over its set top cable boxes.

Shaw says it plans to gradually discontinue cable radio service across its entire coverage area.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Cox Ads 5-2012.flv[/flv]

Cox Cable has slammed its phone company competition in a series of new TV commercials that call out antiquated and slow DSL. But customers switching to Cox have to endure that company’s unjustified Internet Overcharging schemes.  Cox arbitrarily limits your Internet usage in an effort to maximize profits and reduce costs.  Watching the online video Cox advertises could put you perilously close to your monthly allowance. Exceed it once too often and you may find your account shut off.

Cox executives promise they’ll listen to customers and what they want. Stop the Cap! urges you to participate in our pushback against Cox usage caps. Tell the cable company it does no good selling their broadband service for online video when the company threatens to shut it down if you watch “too much.”  (2 minutes)